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Practising law in foreignland - Interview with Antony Dapiran , Partner at Davis Polk, Hong Kong
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Investment Banking
Law
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A Journey of Wonders: Asia Exposure 2011
Legal Insight
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Demystifying media in China
Chinese youth en trepreneurship in London
Working for development - what an internship can teach you
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Working in a Hedge Fund - Interview with Dr. Eric Jackson and Jacky Chan of Ironfire Capital
Promoting East Asian Languages in the UK - Interview with Catherine, the Language Co-ordinator in LSE
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Teaching in China Interview with Tim Wei
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LSESU Asian Careers Society
Editor’s Note
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China and the Silence emergence World: The rising of South Korea importance of in the global econ- foreign investment omy in the last decade
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Should investors invest in China? A paradox
RMB Internationalisation: Hong Kong’s Favourite Dim Sum
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Consultancy
Accountancy
28 The Life of a Hong Kong barrister Temple Chambers
37 Interview with a development professional
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A Western perspective on life in Hong Kong - Interview with Thomas Rees, a Skadden trainee
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45 Contrasting Flavours - East and West
lsesu asian care Who are we? The LSESU Asian Careers Society (‘ACS’) is the only society on campus which specializes in providing insights into different career opportunities around Asia. Our size, extensiveness and continued engagement with students and corporate firms have reinforced our reputation as a premier source of information and opportunities within the LSE. We currently have over 700 members, including 450 undergraduates and 250 postgraduates. Our members are all either from Asia or show strong interests in building career paths in this fast-growing and increasingly influential region. Our Work We act as a platform for members to explore career prospects surrounding the following fields: Accounting, Banking, Law, Management and Consultancy and
04 | LSESU Asian Careers Society
eers society Alternative Careers. Throughout the school year, we organize a diverse range of events in hopes of spanning the bridge between firms and LSE students. In offering companies access to our growing membership database, we serve as the perfect channel for firms to recruit graduates of the highest calibre. Our Aims The ACS has always been dedicated to prepare LSE students for their future careers. We aim to increase their understanding of their interested sectors, deliver comprehensive guidance on developing key competency skills and maximize their chances to meet, network and learn from industry professionals. We review and develop our ideas to deliver the most relevant, practical and useful events that are enjoyable for both students and participating companies.
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editor’s note The worldwide job market has been tough due to the aftermath of the financial crisis. While everyone is concerned about how the unpredictable situation of the European debt crisis affects job security, Asia seems to be an ideal place to work judging from its growth prospects and economic stability. As the leading student society, which focuses on exploring career opportunities in Asia, we are obliged to obtain and provide our members with unbiased information and perspectives on the job market in Asia. The Asian Careers Journal is a brand new initiative of the L.S.E. Asian Careers Society. In contrast to career guides, this magazine aims to offer you an insider’s perspective of what it is like working in various industries in Asia no matter where you are from. It is of paramount importance for us to include every aspect you need to consider in order to pursue a career in Asia. Therefore, the magazine is divided into 4 major sessions, namely Global Economy, Core Careers, Alternative Careers, and Life. In Global Economy, our research journalists present you with several key issues that implicitly link to the emergence of job opportunities in Asia. For instance, Deepanshu Mohan’s “China and the World – The Rising Importance of Foreign Investment in the Last Decade” demonstrates the increasing significance of capital markets in China, which helps open up opportunities in the investment banking industry. In Core Careers, we have identified the 4 most popular graduate destinations for L.S.E. students: Investment Banking, Law, Consultancy, and Accountancy. Our journalists analyse recent trends in Asia for each of the fields in a structured manner, followed by interviews with employees in prestigious firms. Information for the aforementioned careers is overflowed by the numerous presentations and workshops organized by student societies on campus. However, we seek to open up more career options to you in light of the ever-changing job landscape. Hence, our journalists also explore the following alternative careers by conducting interviews and research: Entrepreneurship; Hedge Fund; Fast Moving Consumer Group (FMCG); Development; Education; Retail; Linguistics; and Media. Life after work is undeniably another important determinant in moving to Asia. As such, we highlight the cultural elements in Asia with both Western and Eastern perspectives to conclude the magazine. This inaugural issue of ACJ is free of charge and will be available as an electronic copy on www.lsesu-acs.com. We hope you will find this magazine both informative and interesting. Please feel free to send us any comments on lseacj.2012@gmail.com. Thank you. Samuel Wong and Diana Chan Founder
06 | Editor’s Note
e
global economy Silence emergence of South Korea in the global economy By Deepanshu Mohan South Korea has become one of the world’s most dynamic economies by successfully pursuing export-led economic growth and industrialization. Over the last three decades, Korea recorded an impressive annual GDP growth rate of nearly 9%. The market opening measures adopted post the crisis of 1997 represents, to a large extent, an acceleration of Korea’s previous commitments under the frameworks of the WTO and OECD. South Korea has been identified as one of the eight most rapidly developing markets. This diverse group of countries, which also includes Brazil, Russia, India, China, Mexico, Indonesia and Turkey, are not yet developed markets, but each already contribute at least 1% to global GDP. In addition, these countries will continue to promote growth on a global scale. This article considers Korea’s market opening measures and capital account liberalization agreed to with the IMF, and evaluates Korea’s potential new role in regional and global economic cooperation especially post the financial crisis. Since the 1960’s, South Korea has transformed from an agriculturalbased economy into an industrialized and high tech modern economy. The economic shift has been from a centrally planned, government-directed investment model towards a more market oriented one. The Asian financial crisis of 1997-98 exposed the long standing weaknesses in South Korea’s
08 | Global Economy
development model, including high corporate debt-equity ratios, huge overcapacity and duplication, massive foreign borrowing and an undisciplined financial sector. This forced the country to implement an overdue economic restructuring and opening of the economy. Extensive financial reforms have not only restored the market stability but have made South Korea to integrate with the global world. Prudent macroeconomic policies have contributed to the achievement of stronger growth, moderate inflation, low unemployment, and fiscal and current account surpluses. In several industries, South Korean companies are successfully transforming from lowcost producers to global corporate leaders. Increasing exports to the other markets and a stable macroeconomic environment has been critical for the South Korean economy and will continue to be in the future. Like other open economies, South Korea was also hit hard by the global financial crisis, which resulted in a sharp slowdown of economic growth in 2008 and 2009. In response to the crisis, the government implemented comprehensive monetary and fiscal measures to mitigate the impact and support economic activity. These timely measures have successfully stabilized the economy and the financial system, paving the way for a recovery which has been increasingly led by private sector demand especially by creating a lot of skilled employment opportunities within
varied sectors in the country. What has been the South Korean success story post the financial crisis of 1997? In 1998 the Korean economy experienced its most serious difficulties since the Korean War. It appeared to some as if the entire economy was melting away. Yet clearly there is resilience in this picture. By June 1999, the Korean economy was showing amazing speed and recovery in every respect. The rate of economic growth rose to 4.6% in the first quarter of 2000 and went to 6% by the end of the year. Improvement in the current account balance is also very impressive. Current account balance recorded a 40$ billion surplus in 1999 and since then we have been seeing a great spike in the picture of current and capital account surpluses in Korea till 2011. The dramatic recovery of the Korean economy to some extent reflects the reform efforts made by business, financial institutions and government. Many corporate reforms have been pursued by allowing market forces to operate, some with pressure from the government. To increase the transparency of management and improve their governance structure, big businesses changed the composition of board members so that at least two directors came from outside the company. In this way, diverse efforts have been made to improve the financial structures of chaebols (South Korean form of business conglomerate) .
By the end of 2010, South Korea’s economy accounted for 2% of global GDP. Now, Korea is one of the eight leading markets that will collectively contribute the largest increases to global GDP in the coming decades. The figures are available in the following figure:
Reforms and their impact: Business swaps or so-called ‘big deals’ have been made formally by voluntary agreements between chaebols, though the Korean people know that pressure of government is behind these ‘voluntary’ deals. LG agreed with Hyundai to sell LG’s semiconductor business to Hyundai. Samsung and Daewoo agreed to swap Samsung’s automobile company for Daewoo’s electronic company, but the Samsung case has always been a very complicated economic and political issue. Some of these reforms made by big businesses have helped to strengthen their international competitiveness in the long run. The ‘involuntary reforms’ forced by the government, have done a great deal for the rising market for Korea which has also given rise to a lot of skilled employment opportunities available all over Korea.
Some key factors according to me, that have played an important role in the rising power of the Korean economy and its potential in becoming a leading global market are: An advanced market economy In every sector of the economy winners and losers are determined by free competition. As
in nature’s survival of the fittest, the winner is determined by unlimited competition in the free market. The Korean government, especially in the case of South Korea has always facilitated competition rather than limiting it. The role of intellectuals has been extremely important in this picture since their confidence in the market mechanism has helped sustain viability and legitimacy. As an export-oriented economy, global competitiveness has been a key factor to Korea’s economic growth. To this end, Korea, like any other advanced countries has been exceptional in developing core industries that have been internationally competitive. Many Korean companies have transitioning from low-cost producers to brand-name providers to increase the value of their products. Increasing expenditure on Research and Development: Also, Research and development
(R&D), as a percentage of GDP in South Korea, has been consistently trending up since the 1990s, growing from 1.7% in 1990 to about 3.5% in 2008, as companies seek to differentiate their products . In fact, year-over-year growth in R&D expenditure surpasses that of the US and Japan, due in part to South Korea’s low base expenditures. In addition to increased spending on R&D, many companies are employing strategic marketing, and are promoting their products through aggressive advertising and sponsorship campaigns. As a result, they have received some high rankings in brand value surveys, and many of these companies are now considered to be rising industry leaders in the global market. The three largest companies in South Korea in terms of equity market capitalisation; Samsung Electronics, Hyundai Motors and Posco, have all established strong positions in their respective industries. In fact, in terms of the emerging markets, South Korea’s brands are more recognisable than many established global brands. South Korea’s electronics companies are an example in itself which has gained a significant market share in global electric equipment sales. Samsung Electronic and LG Electronics, the two largest local electronics companies by market capitalisation, have achieved greater market share than some of the major Japanese companies in the global television hardware market, and are second only to Nokia in the mobile phone hardware market. In aggregate, South Korea’s share of the global mobile handset market by volume was around 20% in 2004 and grew to 30% in 2009.
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Korea’s stable macroeconomic environment has provided an accommodating backdrop for continued growth. Korea’s fiscal balance is better than the emerging and developed economy averages, while its level of government debt is significantly lower than its developed market peers and in line with the emerging markets average. Furthermore, South Korea’s significant foreign exchange reserves have allowed the central bank flexibility to maintain a stable foreign
exchange rate policy. The benchmark, Korea Composite Stock Price Index (KOSPI), includes about 720 companies with diversified exposure across ten sectors . The index is tilted toward export-oriented cyclical sectors, such as the Industrials, Information Technology, Materials and Consumer Discretionary sectors. The market capitalisation of the KOSPI is $914bn, with $4.6bn in daily turnover.
South Korean companies, on average, have solid balance sheets and are showing improving profitability. Earnings momentum has been strong, with 2010 earnings per share (EPS) growth at about 56%, one of the highest in the Growth and Emerging Markets. Conclusion South Korea’s economy is on track to join the ranks of the wealthiest nations over the next few decades. As one of the leading markets, I believe South Korea is at its peak right now in its road to become an economic superpower. A number of South Korean companies have achieved significant global market share and status as a result of the strategic decision to transform from low-cost producers to brand leaders. South Korea’s equities offer investors access to its large and growing companies and to the Growth and Emerging Markets they serve . Furthermore, many companies are now showing improved corporate fundamentals, yet are trading at discounts to historical valuations. We believe South Korea’s equities provide investors with an attractive opportunity to capture this compelling growth.
China and the World: The rising importance of foreign investment in the last decade By Deepanshu Mohan
The current wave of foreign investment in China’s banks in the last decade especially after the further opening of the banking sector under the WTO agreement has indicated that foreign banks are likely to play a critical role in China’s growth in the future. In this article I have taken stock of the involvement of foreign banks in the Chinese banking sector in the perspective of international experience. While in most other countries foreign bank entry took the form of direct takeover or majority shareholding, foreign investments in China’s banks have
10 | Global Economy
been minority shareholdings with very limited management involvement. The evidence provided suggests that China appears to be well positioned to benefit from further opening of the banking sector to foreign investors. International experience in the past decade has suggested that greater competition from and participation of foreign banks can in general bring important benefits if appropriate incentives and sufficient opportunities are created. Introduction Banking reforms have been at the core of China’s strategy to improve the intermediation of its
large private sector savings. As part of the financial liberalization program, reforms in the banking sector have been implemented over the last two decades, replacing the mono-bank system with a multi-layered system that separates commercial lending and central banking functions. Considerable progress has been made in restructuring three of the four major state-owned commercial banks (SCBs) and, by end2007, all three banks announced the selection of major foreign financial institutions as strategic investors with minority ownership stakes. The three banks have also recently completed initial public
offerings (IPOs). Opening the banking sector to foreign competition is part of that broader strategy by the Chinese authorities to enhance the efficiency of banking sector through various channels including greater financial innovation and improving corporate governance in banks. Increasing foreign participation has been one of the key trends in the Chinese banking system in recent years. Foreign banks do business in China either directly through their own branches and subsidiaries or indirectly as minority investors in Chinese banks. The indirect participation has grown rapidly in recent years, particularly in 2005, as almost all major Chinese banks now have a foreign strategic investor. Since June 2008, foreign investors bought over US$67 billion worth of shares in Chinese banks.
tic banks in noncore businesses such as credit cards, which brings both benefits and risks. In these areas, the foreign banks’ technological advantage and global networks can increase efficiency and help to expand these markets. Overall, the main lesson of international experience is that foreign banks can bring important benefits if appropriate incentives and sufficient opportunities are created. In any event, with or without foreign participation, China’s banking system needs to continue to forge ahead with fundamental reforms in internal control, risk management, and corporate governance, to improve the intermediation of China’s large pool of domestic savings.
Foreign Banks In China So far, foreign banks’ direct activities have remained restricted. As of end-September 2009, foreign-funded banks accounted for 5.8 percent of total banking assets. Similar to other types of banking institutions, foreigninvested commercial banks are supervised and regulated by the China Bank Regulatory Commission (CBRC), and there have been important restrictions on their RMB-denominated operations, mainly in providing banking services to individuals. More recently, foreign banks are starting to play a more substantial role as minority investors in domestic banks. There have been
It is important to notice the pattern in which the foreign investors have involved themselves in the Chinese banking sector, drawing on international experience with foreign banks in other emerging markets. Direct participation has remained relatively small, but it is likely to grow over time as remaining restrictions are eliminated effective December 11, 2006 under the WTO agreement. Unlike many other emerging market or transition economies, China’s domestic banks have well-established and an extensive presence, thus direct market penetration by foreign banks may not be easy. While in most other countries, foreign investment took the form of direct takeover or majority shareholding, foreign investment in China’s banks has taken the form of minority shareholding with very limited management involvement. Thus, how much influence foreign investment will have on the domestic banks’ core business— and, most importantly, risk management—is therefore debatable. Many of the strategic investors have also entered into separate arrangements with the domes-
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two rather distinct phases in this entry into Chinese banks. The first was of 2001–2004 where with the conclusion of China’s WTO negotiations, foreign banks’ entry increased. Entry was limited to joint-stock commercial banks and city banks in major cities. The large state-owned banks were in poor financial situation and foreign investors were mostly interested in potentially the most profitable geographical areas. Smaller banks also required smaller investments.
zhou City Commercial Bank.
The second has been the phase from 2004-present where foreign investors’ interest intensified further, as reforms in the large stateowned banks gathered speed and as the government began to permit higher foreign ownership.
• strong growth of the Chinese
Since 2004, foreign strategic investors have entered in four of the largest five banks. The 2004 purchase by Hong Kong and Shanghai Banking Corporation (HSBC) of a stake in the Bank of Communications (BoCom), China’s fifth largest bank, was the first major transaction. Since June 2008, foreign investors have invested or committed to invest over US$84 billion in the three large state-owned commercial banks, and all three have acquired strategic investors: the Bank of America (BOA) in China Construction Bank (CCB), a consortium led by Royal Bank of Scotland (RBS) in the Bank of China (BOC), and Goldman Sachs led investor group in the Industrial and Commercial Bank of China (ICBC).
There have been several reasons that may have motivated the interest of foreign strategic investors in the smaller banks. While there are substantial risks in entering the Chinese banking sector as a strategic investor especially post the financial crisis, (including in corporate governance, legal system, reliability of financial information, and regulatory treatment), foreign interest may have been influenced by:
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Foreign ownership participation in smaller Chinese banks has increased substantially as well. In 2009, five Chinese banks, including BoCom, Shenzhen Development Bank, and Xi’an City Commercial Bank, brought in foreign strategic investors, doubling the number of Chinese banks with foreign equity participation. In 2010 and early 2011, a number of further arrangements with strategic investors were announced, including China Minsheng Banking Corporation, Huaxia Bank, Bohai Bank, Bank of Beijing, and Hang-
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economy, which creates profitable opportunities; a large banking sector, relative to the economy, allows considerable space to expanded market share; recent progress in reforming the banking sector, improving regulation and supervision, and the WTO commitment to open the banking sector to foreign competition as of December 11, 2006; and the “global balance sheet” argument—because of the global scale of operations of major foreign banks, the re-
turn on investment in technology is greater and once the technological platform has been installed, the marginal cost of extending the platform and integrating the processing of transactions to a regional center is very low. The Impact of Foreign Investment So far the involvement of foreign investors in improving China’s banks has been limited. Foreign investors have increased bank capital, even though part of their investment went to SAFE Investments as foreign investors partly bought existing shares. They have provided credibility needed to launch IPOs of relatively large size and also induced improvements in corporate governance and management, with some board seats being occupied by candidates nominated by the foreign investors. In addition to that the foreign investors have provided limited technical assistance. Thus, overall, it remains unclear whether foreign strategic investors have sufficient incentives and opportunities to improve the core operations of Chinese banks.
The ownership shares of foreign strategic investors are relatively small and their management involvement is minimal. While the entry of foreign investors will undoubtedly bring some benefits, including greater transparency and some knowledge transfer, the structures of the strategic agreements so far do not give strong assurances that the investors will improve credit risk management, which is at the core of recent and potential future problems of Chinese banks. Operations in noncore areas by strategic partners can be lucrative irrespective of the bank’s overall performance. Almost all strategic investors have started joint operations in one or more noncore areas, with potentially larger involvement. Importantly, the return on such investment is not fully dependent on the bank’s overall performance, which will hedge some of the risks mentioned above and also weaken incentives for the investors to push hard for changes in the core commercial banking business. The authorities need to ensure that: (i) no value is lost in the side cooperation agreements, because the banks will all be listed and there could be major legal and reputation issues; and (ii) foreign investors have strong incentives to fully engage in improving core banking business. Lessons from International Experience for China International experience does not offer much insight into what effects foreign investors may eventually have on the performance of Chinese banks. However, international experience suggests a positive impact of the entry of foreign banks on efficiency. For instance, relaxed branching restrictions within states in the United States have been associated with increased credit availability, enhanced bank efficiency, and faster economic growth. The implication of this experience for foreign banks investment is that foreign banks may indeed have a positive effect on the average efficiency of the banking sector in the des-
tination country, because they are likely to be among the most efficient in their country of origin. The benefits of foreign bank entry may depend on the level of development of the host country. For emerging market and developing economies, like China, foreign entrants tend to be more efficient than incumbent banks and stiffer competition seems to improve overall bank efficiency. Experiences with foreign banks participation tend to be especially positive when financial firms expand into markets where they have acquired specific expertise and introduced more sophisticated risk management techniques. Other studies that explored the relationship between foreign bank entry, market structure, and interest rate spreads and margins also find a positive relationship between foreign bank entry and intermediation efficiency. One concern in many developing countries is that foreign banks skim the best customers and leave lower quality customers to domestic banks, which in turn are left with high-risk portfolios and are unable to provide access to credit to more risky clients. While there is some evidence that foreign banks at least initially offer higher-quality services and are able to successfully compete for the best customers, there is no conclusive evidence showing that this is not an efficient outcome or that it leads to financial stability issues. In a recent attempt to address this issue, Detragiache, Tressel, and Gupta (2006) in one of their research showed that, in poor countries, a stronger foreign bank presence is robustly associated with less credit to the private sector and that in countries with more foreign bank penetration, credit growth is slower and there is less access to credit. However, they did not find any adverse effects of foreign bank presence in emerging market economies, so this concern may not be relevant for China. Moreover, China’s main problem has been inefficient bank-
ing intermediation rather than lack of access to credit overall. The international ownership of banks also has a significant impact on bank spreads and profitability. Foreign banks, specif-
ically, realize higher interest margins and higher profitability than domestic banks in developing countries. The evidence has reflected the fact that in developing countries a foreign bank’s technological edge appears to be strong enough to overcome any informational disadvantage in lending or raising funds locally. Foreign banks, however, are shown to be less profitable in industrial countries, where they may not have a technological edge. Conclusion Overall, China appears to be well positioned to benefit from further opening of the banking sector to foreign investors. The main lesson of international experience is that foreign banks can bring important benefits if appropriate incentives and sufficient opportunities are created. Creating such incentives and opportunities for foreign investors would help so that the financial system can reap the potential benefits of greater foreign participation and foreign investors can bear the full risks and rewards of lending decisions made by these banks. The entry of major foreign banks as minority investors in Chinese banks is a relatively recent event and the full opening of banking services to foreign competition is an ongoing process.
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Therefore, some-time will be needed before a more definite experience with the role of foreign banks in China can be identified especially once ‘The Great Recession’ witnessed all over the world
today subsides. Future research could usefully focus on the impact foreign investors have had on the core operations of Chinese banks, the effective degree of opening of the banking sector in different
product lines and regions, as well as the impact potentially greater foreign bank presence may have on banking market conditions and efficiency.
Should investors invest in China? A paradox By Donald Poon Should investors invest in China? The answer seems pretty obvious as far as the economic background is concerned.
puted by GMO, a respected asset management firm, shows projected performance of S&P 500 based on average path of 10 burst bubbles in the past and it does not look pretty.
But history may not repeat itself, at least not in the exact same way. Taking a more conservative, forward looking and fundamental approach (see Box1), the expected annual return of the US equities is about 4% in the long run given the gloomy growth prospect of firms. Annual return of 4% is still very low by historical standard – the US common stocks provided an average annual rate of return of about 9.8% from 1926 to 2010. With that economic background concerned, China provides a stark contrast. It has been growing with an average annualized growth rate of 9.91% since 1979, and is likely to grow at a pace of 8% in the coming decade. This implies an annual equity return of more than 10% in the long run!
Four years since the start of the current global financial crisis, the Western world’s economy does not seem to be returning to the normal 3% growth rate anytime soon. As illustrated vividly by Rogoff and Reinhart’s “This Time is Different: 8 Centuries of Financial Folly”, countries that experienced financial crisis were followed by long periods of low growth. The debt overhang drags the economy because households and firms (and even governments!) are deleveraging by paying down the debt accumulated through the booming years. In Europe things are even worse, assuming all countries to remain in the euro, the peripheral countries has to go through years of painful deflation and low economic growth to regain competitiveness. One of the implications of low economic growth is low equity return. The following graph com-
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Box 1
In the long run stock equity prices reflect fundamentals of firms – earnings, growth, dividend, etc. Or in economist’s language a firm’s value is the discounted cash flows that the firm generates in the future (The Gorden Model). Base on that a simple way to estimate long run equity return is by the following formula: Long Run Equity Return = Initial Yield + Expected Growth Rate For example, from 1926 to 2010, the return of US equities is 9.8%. The dividend yield for US equity on 1st January 1926 was about 5%, the long-run growth of earnings and dividends was also about 5%. Thus adding the initial dividend yield to growth rate gives a close approximation of the actual rate of return in the long run. Using that formula one will expect the overall US stock market to give a return of around 4% return over the next few years (initial yield of 2% + 2% growth). By the same calculation, Chinese stocks give an estimated return of 10.7% (initial yield of 2.7% + 8% growth) For foreign investors they have to take into account changing value of the currency. So the equation becomes: Expected Return (dollars / sterling): Initial Yield + Expected Growth Rate + Expected Yuan Appreciation And the estimated annual return for foreign investors assuming a modest 2% RMB appreciation will be a staggering 12.7%!
In foreign investors’ prospective the return is even higher as Chinese Yuan remains to be one of the most undervalued currencies in the world. Almost all relevant data show an undervaluation of Renminbi in Purchasing Power Parity term. The most recent IMF data suggests Renminibi is still undervalued by 36% although it has appreciated by 4.7% against US dollar and 4.8% against the Sterling in 2011. The trend is likely to continue due to international political pressure and inflation worries in China. Although its momentum in the short run may be limited as trade surplus only accounts for 2% of GDP in China now compared to nearly 10% in 2008. Furthermore the correlation between Shanghai Stock Exchange (SSE) and the S&P 500 is very low, 0.142 over the past few years . So for a rational investor the answer seems straight forward – diversify your portfolio with Chinese Stocks and enjoy the benefit from high growth, currency appreciation and diversified risk. However, take a closer look into the history it is not hard to find that in recent years China’s economic
growth did not translate into equity performances. The Chinese economy grew by around 9% yet the SSE composite index dropped by 22% in 2011. Indeed, research done by Elroy Dimson, Paul Marsh and Mike Staunton of the London Business School finds zero correlation between economic growth and stock market return . I have great sympathy for this view, but although market may be influenced by waves of optimism and pessimism in the short run, in the long run stock market will eventually reflect fundamentals of firms, so the correlation appears with a time lag. In China’s case the growth did not turn into higher equity prices is because of the stock cycle – there is a change in the valuation of the stock market. Stocks were overvalued in 2009 (Price earning multiples of around 30) and it has come down to a low / reasonable level (PE multiples of 13.4) recently, which makes an attractive case for investing in Chinese stocks. Having said that, investing in Chinese stocks are not without risks. There are two key risks that investors should be aware of.
nese firms. Even star fund managers who had done their homework by digging into companies’ balance sheets were not immune to them. Hedge Fund titan John Paulson, who was once considered a genius and made billions by short selling subprime mortgages in 2007, has suffered a $720 million loss by investing in Sino-Forest Corporation, which is a commercial forest plantation operators in the People’s Republic of China and was reported to have fraudulently inflating its assets and earnings in June 2011. Anthony Bolton, Britain’s “Warren Buffet” who deferred his retirement when he saw investment opportunities in China, was similarly hit by fraud losses following a rash of accounting scandals on small and mid-cap Chinese mainland companies listed on the New York Stock Exchange. Second, China’s financial market is premature. The stock behaves vastly different from the efficient stock markets in the Western world, and is characterized by extreme volatility. This is best illustrated by the great fluctuations of the price earning multiple.
First, accounting frauds of Chi-
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Furthermore over this period there was no economic cycle – GDP is constantly growing at a high pace. One reason for the volatility is lack of reliable free open media and lack of punishment for those spreading false information. Just public media that report accurate information about companies and stock news will reduce “noises” and false information created by company insiders and government officials with conflict
of interests. As these “noises” and fake information led the market due to lack of severe punishment, it is not surprising that “it is stupidity, not mother-wit, that is accumulated in the crowd” and the stock market went through frequent super cycles just like the tulip-bulb craze in Holland in the 17th century and Britain’s South Sea bubble in the 18th century when there was no reliable financial information other than news
spreading through the world of mouth. As Milton Friedman famously said there is no such thing as a “free lunch”. Investing in China does not guarantee higher returns. But given the grim economic prospect of the Western world, the appreciating Yuan that gives extra return, and the low valuation that Chinese stocks has, those risks are sensible to take.
RMB Internationalisation: Hong Kong’s Favourite Dim Sum By Ka Hong Pang, Raphael
The USD has always been the crown jewel of the United States, symbolising its economic and global influence. It is the standard unit of currency in the international commodities market, the most traded currency and most importantly, the world’s dominant reserve currency. The status of the USD was never rivalled ever since it replaced the Sterling as the world’s major reserve currency after the Second World War. However, this status quo is about to change due to the global trade imbalance and the resulting high level of debt that the US has accumulated. There seems to be a gradual and continual change in the market’s perception of the credibility of the greenback and hence, its value and suitability as a reserve currency. As market launches a desperate search for an alternative to the dollar, the spotlight will inevitably be on the few candidates (such as Euro, RMB and SDRs) with the potential of becoming the world’s next reserve currency. Among them, RMB definitely stands out as a potential alternative to the USD. China has recently surpassed Japan to become the world’s second largest economy. Despite China’s impressive and rapid economic performance, RMB plays a relatively small role in international trade settlement and is currently the 17th most traded currency.
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This is especially surprising given that China is the world’s largest exporter, with the international trade volume exceeding US$3,000 billion in 2010. The main reason for that is rooted in the fact that RMB is not well-liquidated and offshore RMB lacks sufficient investment channels.
these criteria would reveal that RMB satisfies none of the above criteria. However, it is evident that the Chinese government is determined to promote RMB as an international reserve currency, with Beijing’s recent announcement of its intention to achieve full convertibility in the RMB by 2015.
The Chinese government has long been imposing strict regulations on capital flows across the Mainland Chinese border. As a result, the RMB is not fully convertible offshore (offshore refers to regions across the world, outside of Mainland China) and foreign investors, with the exception of QFII, lack the RMB-denominated investment channels for investing their RMB holdings. The People’s Bank of China also acts as a RMB clearing house for Mainland’s cross-border trades, which are usually settled in USD. These effectively stripe the important sources of the international supply and demand of RMB.
Hong Kong (HK) will be playing a crucial role in the internationalisation of RMB. Beijing has designated HK as the first ever offshore RMB trading center, with the Bank of China (HK) appointed as the local clearing bank for HK RMB businesses. Since then, there is a significant accumulation of RMB in HK, with RMB-denominated deposits in HK growing ten-fold from HK$50 billion (US$6.5 billion) to HK$500 billion (US$64 billion) in 15 months. (See Diagram 1) These offshore RMB holdings are collectively known as CNH.
The three major criteria for a currency to become a reserve currency are: • to allow cross-border trade settlement in that currency • to be well liquidated and fully convertible worldwide • to provide adequate investment channels dominated in that currency, of which, a deep and liquid bond market is essential. An assessment of RMB against
The rapidly expanding RMB depositary base in HK provides a supply of CNH that fuels the growth of RMB transactions in HK. Under a pilot programme engineered by Beijing and Hong Kong, cross-border trades be-
tween China and the rest of the world can now be settled directly in RMB, but offshore in HK. Since its introduction, HK has seen an exponential growth in the volume of cross-border settlement using CNH. (See Diagram 2) This effectively minimises transaction costs and the foreign exchange risks, which are beneficial to both parties. RMB is now deliverable in HK, marking the realisation of the fullconvertibility of offshore RMB in HK. While it is a triumph to the Beijing authority, it is worthwhile to notice that CNH has an exchange rate different to that of CNY (onshore RMB). Chinese regulators has explicitly separated the onshore RMB market from its Diagram 1 (HSBC)
Diagram 2 (Bank of China, HK)
Diagram 3 (Bank of China, HK)
offshore counterpart and limited the flow of RMB between both markets. This generated two different sets of supply and demand conditions, leading to difference in market-clearing exchange rate. Although offshore RMB is fully convertible in only HK via a different exchange rate, it is a good proxy to the CNY exchange rate and serves as a major milestone in the internationalisation of the RMB. With the growing RMB-denominated depositary base, there is a growing demand for RMB-denominated financial products. The market answers this strong demand with a good supply of RMBdenominated bonds (also known as Dim Sum bonds) and other products, such as RMB-denominated swaps and insurances. (See Diagram 3) This would provide the much desired investment channels for offshore RMB, especially for foreign investors who are not part of QFII. Going forward, the strong growth in the
CNH market in HK is likely to continue. The CNH market provides real opportunities for corporate fundraising (in terms of IPOs) and for investments that potentially bring positive returns. As the CNH market develops, a wider variety of products (such as equities) are expected to be available in both the primary and secondary markets, making it an increasingly attractive market for investors. This attractiveness is further enhanced by the expectation of RMB appreciation. With every increase in the expected rate of RMB appreciation, RMB denominated assets become relatively more attractive, thus, lead to a potential increase in the rate of RMB accumulation in HK. This would increase the supply of CNH, which in turn fuels the growth of the CNH market in HK. The USD-settled non-deliverable forwards (NDF) in HK are used as a proxy investment of RMB, hence, sometimes regarded as a competitor to CNH investments. The exponential growth of the CNH market sees the daily trading volume of CNH likely to surpass that of NDF market by the end of 2012. Despite being dwarfed by the CNH market, the NDF market in HK will likely survive as a complimentary investment vehicle. Although there is a lack of variety and the opportunity to invest in real underlying assets, the edge of the NDF is a deep and liquid market that is capable of absorbing large RMB speculative positions in the short and long term. So… the big question for the internationalisation of RMB is its impact on the USD and whether USD will be completely replaced by RMB in the future as the international reserve currency. The relationship between the relative growth of HK’s CNH market and the slowing declining NDF market share striking similarities with those of the RMB and the USD. Looking at it may shed a light on the answer…
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core careers Investment Banking By Kitty Lum
Overview Investment banking activity in the Asia region has been growing exponentially and is predicted to follow the same trend. Eurozone countries have been heavily affected by the financial crisis and at least nine euro government bonds had been downgraded by S&P 500 earlier this year. In contrast, therefore, emerging markets in Asia has become a much safer bet for investment. High economic growth driven by consumption is being anticipated in Asia, following the prediction that some 85 per cent of the growth in the global middle class – which is set to increase from 1.8 billion people in 2010 to 3.2 billion by 2020 and to 4.9 billion by 2030 – is expected to be in Asia (Accenture, 2011). Moreover, more organic growth is expected in
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companies in China which are still under-leveraged. An IMF report earlier this year estimated that China will outgrow the United States by the year 2016. Would that necessarily be true? The answer is debatable. Tighter regulation introduced by Basel III is going to impact financial institutions globally. Higher capital and liquidity requirements will likely cause undesirable effects such as a higher pricing of financial products and a reduction on the variety of products to be sold in the market since they bear too expensive costs. The adaptation to Basel III regulations will therefore be a hurdle to the investment banking business around the globe. It is uncertain whether this will adversely affect the fast-growing investment banking business in Asia, as supporters of Basel III would argue
that regulations, in the long run, provide a safer investing climate and will therefore raise more advisory and capital raising opportunities to global investment banks. Mergers & Acquisitions M&A activities in Asia played an increasingly important role in worldwide financial activities. The global economic crisis in fact gave rise to a greater investment opportunity for western firms to make a safer bet by acquiring companies in the emerging markets as opposed to alternative ways of expanding business. In other words, Asian businesses became a shelter to Western firms under great economic turbulence. According to The Thomson Reuters/Freeman Consulting survey, M&A activities in Asia-ex-Japan are expected to rise by 33 percent in 2012, compared to the increases of 21 percent in Americas and 18 percent
in EMEA. The $13.7 billion acquisition of Switzerland’s Nycomed by Japan’s Takeda Pharmaceuticals took place in 2011 and was known as the biggest Asian M&A deal of the year. The deal was advised by Goldman Sachs, which subsequently was ranked the top M&A advisor in Asia, followed by UBS and J.P. Morgan. Financial analysts are seeing big impacts placed on M&A by the introduction of Basel III, it is expected that demand for smaller deals will increase at the expense of larger ones. Capital Market To name the leading IPO market in the world in recent years, China is definitely the one and only one. According to PwC, Chinese firms raised a combined $45.5 billion through initial public offerings in Shanghai and Shenzhen in 2011. Despite the volatility in the global economy, it has become a trend that private firms from China conduct offshore IPO in Hong Kong and the United States. On top of that, secondary follow-up listings are also popular in large Ashare companies that are already listed domestically in Shanghai or Shenzhen. Hong Kong makes a good port for follow-up listings of Chinese firms because of the
Law
By Noble Mak Introduction Asia, with its vast market potentials being unleashed, accommodates the rapid emergence and expansion of the legal profession. With the recent downgrade of ratings by Standard and Poor’s on nine European countries, it is widely recognised that international law firms need to expand beyond continental Europe into the East to remain strong. Here,
geographical and political advantages. This would allow Chinese enterprises to gain access to foreign currency and higher international exposure that would benefit further expansion or international M&A. However, stock performances in some Asian firms which conducted offshore IPO in 2011 were not as satisfactory as expected, it had also influenced other firms with such plans to hold back or postpone their IPO. Sales & Trading Prior to the 2008 financial crisis, trading made the biggest part of revenue in investment banks. Because of this, the deterioration of trading activities, due to market’s volatility and tighter regulation introduced by Basel III which caused less products available to trade, resulted in losses in major investment banks. In the 4th quarter of 2011, large investment banks suffered from less trading activities and reported big falls in profits, e.g. J.P. Morgan reported a 23% fall in profit. Structural changes were being faced by traders due to regulations that required higher liquidity standards. Exotic products, i.e. derivatives exhibiting features making it more complex than commonly traded products,
became more transparent and smaller in size. A number of big investment banks are expecting to cut more jobs in the near future and it is likely that traders will suffer as clients in sales & trading are not active under volatility. Private Wealth Management According to Goldman Sachs, by 2030, China will be the largest economy in the world, followed by the US and India, measured by nominal GDP (Goldman Sachs, 2007). Many experts have noted that by 2015-2020, China’s upper class will be larger than America’s middle class. In effect, the demand for private wealth management will increase steeply as Asian economies get richer and more developed. In China, inexperienced investors favour hiring fund managers to manage high risk investments. In accordance to the trend, Chinese government set up new rules to prevent banks from exploiting consumers. The new regulations restricted the quantity and price of loans by setting loan quotas and limits on deposit and lending rates. Independent financial institutions argue that a rapid growth of private wealth management will be driven by more deregulation.
we will briefly take you through the major developments in various Asian legal markets, including Mainland China, Hong Kong, Malaysia and Singapore. Quick advice for graduates interested in entering these markets will also be outlined. Mainland China Buoyed by an exponentially growing financial market, China has a strong demand for reliable legal work within its civil law system.
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The market hubs are in Beijing, Shanghai and Hong Kong, the last of which will be discussed in the next section because it follows a different legal system. International firms have been setting up offices in Beijing and Shanghai, nevertheless local firms still dominate the domestic market. This is because under Chinese regulations, foreign law firms are prohibited from practising Chinese Law. International firms in general hire internationally qualified lawyers to advise on cross-border deals, including inbound and outbound investments, while some cooperate closely with local firms to provide a full range of services to both Chinese and International clients. On the headlines in December 2011, the Australian firm Mellsons and Chinese firm King & Wood confirmed plans for a merger, potentially creating the largest law firm in Asia. The edge of international firms lies in their presence in major cities around the world, which allows them to offer better advice when it comes to cross-border multi-jurisdictional transactions. Firms are actively recruiting graduates to work in China. Outside mainland China, Hong Kong is a popular recruitment centre because graduates are, firstly, trained in common law and secondly, likely to be fluent in spoken Mandarin and written Chinese. ‘We are looking for people who are interested in going to China,’ says Teresa Ko, Chairman of Freshfields’ China practice, to Hong Kong graduates, highlighting the importance of the Chinese market as a destination. With the growth of the Chinese legal market, it is expected that much more will be done to bring in new talents. Hong Kong Hong Kong, though part of China, has a common law system under the scheme of ‘One Country Two Systems’. The advantage about qualifying in Hong Kong is that it has a strongly established legal system which has long attracted investments and thus the vibrant legal market. In 2011, some of the
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highest profile legal work in Asia took place in Hong Kong, including the IPOs of Prada and Samsonite. Tim Parker, Samsonite’s CEO, has explained this move as an effort to ‘orient the company where the world’s center of gravity is going to be in the future.’ Whether this ‘center of gravity’ refers to Hong Kong or the greater China, it leaves no doubt that Hong Kong remains a very important financial and business hub alongside mainland’s flourish.
Most practice areas are prospering as the economy has been on the upturn since 2009. In particular, stricter and more active regulatory investigations by the Securities and Futures Commission has led to growth in contentious regulatory work. Debt Capital Markets is also flourishing, with the quick emergence of RMB-denominated funds, also known as ‘Dim Sum Bonds’, in Hong Kong since July 2010. Yet another important development is the entrance of US law firms, such as Davis Polk & Wardwell LLP and Kirkland & Ellis International LLP. Launching local law practice in Hong Kong, they are also now offering training contracts to graduates. Fluency in the Chinese Language has become a basic skill required of candidates, in addition to the entry requirement of completing the one-year Postgraduate Cer-
tificate in Laws course (Please see http://www.pcea.com.hk) in Hong Kong. Starting salary compares well with other countries, with the average city firm paying trainees a monthly salary of HK$ 30,000-50,000. The difficulty for a foreign graduate, however, is that a huge number of Hong Kong students study law and plan to qualify as solicitors, resulting in the fierce competition for traineeship positions.
Malaysia The Malaysian legal market is quickly booming, particularly in commercial law. In Corporate Law, Malaysia tops the regional growth in Asia by number of M&A deals in 2010. In the same year, Malaysia saw the listing of Petronas Chemicals, the largest IPO in Southeast Asia, highlighting the growth in Capital Markets in Malaysia. Recent debates on the liberalisation of Malaysia market, especially the possibility of opening up the area of Islamic finance to International firms, also may bring about a massive amount of work for the Banking and Finance teams. Despite the growing market, however, the legal profession suffers from the country-wide problem of braindrain. According to a World Bank report conducted by Philip Schellekens in 2011, ‘the number of skilled Malaysians living abroad
has tripled in the last two decades with two out of every 10 Malaysians with tertiary education opting to leave for either OECD (Organisation for Economic Cooperation and Development) countries or Singapore’, and this trend is expected to continue. Neither has there been sufficient inflow of talent to replace the outflow, thus creating a vacuum amid the increasing demand. Malaysia has a fused profession, where one can be both an advocate and a solicitor. Currently, foreign lawyers cannot practice in Malaysia directly. Nevertheless, overseas graduate may join Malaysian offices of international firms, which mainly deal with cross-border transactions and are expecting to practice Islamic finance. To be fully admitted, one may first qualify as a barrister-atlaw in England, then satisfy the practical requirements and formal requirements, details of which can be found here: http://www. malaysianbar.org.my/admission_ requirements.html. Singapore In Singapore there has been significant growth in pan-regional projects, including infrastructural work with Indonesia and Vietnam as well as large-scale local developments. International arbitration is also very important as the government is providing support for the Singapore International Arbitration Centre. Further, Indian
companies are constantly looking to Singapore to finance their deals, due to advantageous tax treaties and cultural ties between the two countries, bringing a lot work to the banking practice. The role of international law firms and foreign lawyers is increasing as they establish new offices in Singapore. Qualified Foreign Law Practice licenses are issued to some international firms, allowing them to practise domestic law by employing Singapore-qualified lawyers. Others enter the local market through joint ventures with local law firms. Overseas graduates tend to join offices of international firms as a foreign lawyer. To be fully admitted, an overseas graduate would have to take Part A of the Singapore Bar Exam. Then, upon completion of a practice training contract, could then qualify as a lawyer (both as advocate and solicitor) in the fused system in Singapore. More information can be found at http://www.sile.org.sg/ Conclusion As Professor Mahbuhani, former President of the UN Security Council, puts it, our time sees the end of Western domination and the return of Asia. And the impact extends, not least, to the legal industry. Though traditionally legal job markets are seen as quite disconnected due to differing jurisdictions, our globalised economy has made it much easier for law
graduates to enter jurisdictions different from where they are educated in. The East has a future that will not be overlooked by the world, and a career there is certainly worth considering.
Consultancy By Simon Lam
Introduction In the field of Management Consultancy, consultants work close ly with clients in order to provide solutions to struggling corporations. These corporations may be struggling with different business situations ranging from supplychain issues to human resourcing problems. Consultants offer their skills and advice in addressing the problems and are hired by companies who require these highly regarded problem-solving skills and outsider perspective of their business. Consultancies in the industry have varied expertise. For example, McKinsey, BCG and Bain specialise in strategy consulting. On the other hand, Oliver Wyman has a strong financial consulting franchise whilst Accenture and IBM are strong in I.T. consulting. Day-to-day work You would be working on projects of different durations. Part of your daily responsibilities includes preparing presentation materials to pitch your practice to the clients and researching into the industry that your client is in. In general, you would spend a lot of time in clients meeting in order to understand their needs and presenting findings and recommendations to them. In certain projects, a consultant would have to travel to the client’s site for a period of time. An example of what they actually do: HSBC has recently hired Boston Consulting Group (BCG) to advise them on the laid-off of employees and also develop a new organisation structure for their consumer banking division in order to enhance the cost efficiency of the organisation.
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and corporate finance. For those of you who is interested in joining the accounting industry, you can choose an area from above and specialize in it.
Management Consultancy in the U.K. versus Asia Overall, the management consultancy industry has a stronger presence in the United Kingdom compared to Hong Kong. The practices of consulting are more prevalent in the UK, with clients ranging from a small self-owned business to multi-national companies (e.g. Rolls-Royce). In Asia, the industry is not widely recognised yet. Corporations you would be consulting with in Asia would be smaller scaled compared with that in the UK. There is also a strong emphasis of financial consulting in Asia. For example, Oliver Wyman only practices financial consulting in Hong Kong but not management consulting. Therefore, you would be constantly dealing with financial institutional clients and thus the varieties of industries that you would be exposed to working in Asia would be narrower than that in the UK. However, upside of working in Asia would be that teams would be smaller and more expectations would be put on you on projects. The industry in Asia is gradually developing, and in my opinion, it would be preferred to start off your career as a consultant in the UK to develop a more completed skillset and move to Asia when the industry would be more developed in the future. Application and Career Path The application systems for most of the consultancy firms are standard. You would be required to fill in the online application system, complete numerical or verbal
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tests, first round interview and the final around assessment centre. First round interviews and assessment centre usually consist of case studies which are common practice of consultancies use in recruiting. You may be given a pile of information regarding a specific business situation and they would ask about your opinions on what kinds of strategies you would implement. For the career path of a consultant, in general, you start off as an Analyst for two to three years before moving on to be an Associate, followed by Manager level and Senior Manager level and ultimately the Partner level. As an entry-level Analyst, you would work across different industries, functions and technologies before specialising in a particular area as an Associate. At the same time, you would also start to develop management skills as they would be responsible for managing the team.
Accountancy By Nelson Poon The industry of accounting is a relatively simpler picture because it is dominated by four professional services firms, namely KPMG, PricewaterhouseCoopers, Deloitte and Ernst and Young. These firms provides services to corporate clients including areas such as auditing, consulting, tax
Auditing provides clients with professional advice and assurance on their controls and accounting systems upon their demand. By knowing operations of the clients, their industry and the issues they face, and this helps the firm to provide them with sound advice. Internal auditing provides services including designing a strategic plan for an internal audit, restructuring existing departments, procedural reviews and the ability to outsource the whole function. Consulting is about delivering a complete resolution to the clients, regardless of their size, their geographic profile or their need. The advice on the management of a firm is multidimensional but fundamentally it is about reducing cost and raising the effectiveness of a firm. Typical ways of improving the efficiency of a firm can be advancing the technology system a firm uses and providing training to staffs. The Tax department helps you with dynamic tax responses for today’s fast-changing environment. The advice delivered should be practical, relevant and cost-effective. Clients can be an entrepreneur, high net worth individual, or representing a foreign company. There are many types of taxes and it is vital for an accounting firm to deliver accurate calculation. Taxes such as business tax, indirect tax and cross border tax require very unique ways when handling. Tax services is a main stream income generator because they provide professional knowledge such as tax planning, tax management and consulting. The field of Corporate Finance offers expertise in Restructuring, Corporate Finance Advisory, Raising Capital, Forensic and Dispute Services, Real Estate Advisory and Transactions. These professional firms also provide a number of Specialist Services, including
business modeling, valuations, and economic consulting. In particular, Restructuring Services provides investigation, restructuring, turnaround and insolvency advice and services to underperforming and financially distressed businesses, their lenders, stakeholders and advisors. Forensic Services are also increasingly sought by companies and lawyers who require detailed investigations to be undertaken or disputes to be resolved.
of accounting and finance exams. In Hong Kong, there is the Hong Kong Institute of Certified Public Accountants for you to start your career as an accountant. You will have to take a comprehensive training programme that provides the knowledge and skills necessary to become a CPA. The Qualification Programme (QP) builds on an accounting degree and progresses to course work and examinations – the knowledge side of the pyramid. On the practice side, you will participate in work-
sibility. Alternatively, the Association of Chartered Certified Accountants is recognized and respected across the world and currently has 320,000 students and members in 160 countries. Under the ACCA Professional Scheme, prospective students can become Chartered Certified Accountants enabling them to work in any aspect of finance or management in any business. The Certified Accounting Technician scheme is an introduction to accountancy. With this qualification students are able to support financial managers in any type of business all over the world. Besides, the CFA charter is known as the gold standard of professional credentials within the global investment community. Around the world, employers and investors recognize the CFA designation as the definitive standard for measuring competence and integrity in the fields of portfolio management and investment analysis.
The accounting industry does sound like a vibrant sector to enter given the opportunities it provides. In order to improve your career prospect, there is a range
shops that simulate issues you will face at work as a CPA. You will then go on to real-world experience, gained under the tutelage of a CPA, which prepares you to assume roles with greater respon-
Apart from the four dominating firms in the accounting industry, there are also smaller auditing firms performing a narrower range of services namely auditing and tax in Asia. The exposure is likely to be smaller but it would be a fantastic place to have a taste of what accounting is like.
Practising law in foreignland - Interview with Antony Dapiran, Partner at Davis Polk, Hong Kong
By Nico Nalbantian
Mr Anthony Dapiran is a partner at Davis Polk’s Corporate Department and a resident in Hong Kong. His practice focuses on securities offerings, private equity and crossborder mergers and acquisitions. He has advised on many of the largest and most complex initial public offerings (IPOs) in the China market, on transactions which
rose in aggregate more than US$60 billion, including the IPOs of Agricultural Bank of China and Industrial and Commercial Bank of China, the largest China IPOs to date. Mr Dapiran was identified as “an emerging star” in the March 2010 ‘American Lawyer’ article entitled, ‘The New China Hands.’ While firmly placed as a member of the jet setting class he had his own beginnings at university.
Antony Dapiran began his career in Australia where he attended the University of Melbourne. He graduated in 1999 with a B.A. LLB (Hons.). He then entered the Bar of England and Wales as well as Hong Kong and began his career with Freshfield Bruckhaus Deringer in 1999. Mr Dapiran has found working in China engaging and inspiring settling on making Hong
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and its people therefore convinced Mr Dapiran to stay in Hong Kong. Hong Kong’s deserved reputation for providing high quality and engaging work has been an added bonus rather than prophetic insights. Antony Dapiran states his most memorable project so far was the IPO of the Industrial & Commercial Bank of China. This IPO raised $19 billion for the bank and was not only the largest IPO in history at the time but was also the first company to debut simultaneously on both the Hong Kong (H-shares) and Shanghai (Ashares) stock exchanges. as a solicitor. Working in Hong Kong was not a matter of chance like many in the late 1990s. This was a deliberate choice influenced by his years of studying Madarin in Australia completed with studies in Beijing. With such a glowing skill set earned through hard work Antony Dapiran is now the model of the ideal lawyer for any Hong Kong practice. These studies in Mandarin formed an integral part of Mr Dapiran’s desire to move to Asia and with this language skill he was able to explore and engage with this “fun and interesting part of the world”. Mr Dapiran’s decision to move was not economically motivated either as in 1999, two years after the handover; the world’s investors had not yet been convinced that Hong Kong was to remain a premier financial city. The city’s colonial past also impacted Mr Dapiran’s choice to stay in China rather than returning to Australia. This is due to the city’s aptitude of accepting expats who, if they themselves are willing to be open to Chinese culture, can integrate easily into the city’s life. This enjoyable integration with the city
The appeal of living in Hong Kong is not work related alone and nor should it be. The city is great fun and an exciting place to live where there is a constant and dynamic mixture of the old and the new, modern bars and restaurants near street markets and temples. Former bastions of colonial authority and European architecture next to towering skyscrapers. Anthony Dapiran has found his personal favourite neighbourhoods to be Wan Chai, where he lives, and Sheung Wan. Close to many Hong Konger’s heart, food, is also one
of Hong Kong’s landmark quality of life factors. This is seen on the high end of the spectrum with the city boasting 42 Michelin Starred restaurants as well as popular street markets. An excellent reason to live in Hong Kong for most but Northern China seems to have rubbed off on Mr Dapiran. This is not an indictment of Cantonese cuisine but rather that he prefers the cooking of Northern China from his days in Beijing. There is no need to worry, he insists, in a city like Hong Kong finding good food from anywhere in the world is no trial. He does make an exception in Cantonese cooking for char sui as an excellent local delicacy. As for advice for any who wish to pursue a career in Asia, Antony Dapiran champions above all a skill in Mandarin as crucial. In the more day to day he advises that anyone who isn’t a local Hong Konger or hasn’t received expert haggling training in the bazaars of North Africa from ever eveb contemplating buying consumer electronics on Nathan Road should they value their money. Antony Dapiran’s parting words as we left the Davis Polk office was more advice: “Don’t eat shark fin soup.”
A Journey of Wonders: Asia Exposure 2011 By Benjamin Fung and Ka Hong Pang, Raphael
There seems to be little doubt that the Asia Exposure trip to Hong Kong is highly popular with LSE
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students every year. Even with only limited promotion on campus, there is keen interest from the student population to apply for and go on this exclusive career trip. This is not surprising given the
leverage that participants receive in participating in exclusive firm visits and networking sessions. I participated in the recent Asia Exposure trip in December 2011,
where I visited 11 firms within a short span of 5 days. These visits provided invaluable chances for me to meet professionals working in Asia Pacific and build up a useful network of connections through exclusive networking opportunities. The edge of Asia Exposure lies in the exclusiveness of its networking session where the ideal ratio of 2-3 participants to 1 professional is normally reached. Another notable point is its strong partnership with leading firms, such as J.P. Morgan, Credit Suisse, Bloomberg, Citi, Deutsche Bank, Goldman Sachs and many others. Close-Knit Family in 5 Days In addition to establishing a network of professional connections, this trip allowed participants to
be closely knitted together, as we spent 5 days together, travelling across Hong Kong and spending most time together. For instance, I was able to make new friends from very diverse backgrounds but we share one similarity: our keen interest in an Asian Career! These friendships will last and are priceless. Chances are we will likely be meeting each other again in the future as we embark on our career paths in Asia. Live it, Experience it, Love it Participants on the trip also have a real chance to live in Hong Kong and feel the pulse of the vibrant and never-sleeping city of Asia. My feel is that most, if not all, of us really enjoyed Hong Kong, especially with its vibrant night life and
delicious Cantonese cuisine. I do recommend those who are considering a career in Asia but have never been to Hong Kong to apply for Asia Exposure 2012 and experience Hong Kong for yourself. Hopefully, you will love Hong Kong as much as I do! A Sumptuous Closing Dinner Wonderful times fly and soon, we came to the conclusion of the trip, a sumptuous dinner at an awardwinning restaurant in downtown Tsim Sha Tsui. With breath-taking 180 degree view of the Victoria Harbour, we chit-chatted with our new friends while we enjoyed the delicacy that defines the fine dining in Hong Kong. This is a truly wonderful journey which I will never forget.
Legal Insight By Nico Nalbantian In December of 2011 some of LSE’s brightest law students, and a tag-along from the history department, set out for Hong Kong. The purpose of this annual Asian Careers Society trip is to investigate the legal landscape in Hong Kong. As the centre of the international financial world in Asia curiosity abounds as to what it has to offer for LSE graduates who wish to begin building their careers. For those who may not be familiar with the history of Hong Kong, Hong Kong became a Special Administrative Region of the People’s Republic of China in 1997. It was handed over by the Crown to the People’s Republic of China in July of that year ending 156 years of British rule. Despite concerns at the time that the handover would
result in a Communist crackdown Hong Kong remains a proud and free city. Hong Kong is today in the top three of the world’s global financial centres and currently rated by the World Economic Forum as the world’s “most developed financial market”. Ka Keung Chan, Hong Kong’s Secretary for Financial Services and the Treasury, attributes this prosperity to the fact that geographically Hong Kong is next to China but crucially Hong Kong is economically and politically separate. This means that Hong Kong has the tremendous access to the investors and companies in China coupled with the financial regulation companies in the rest of the world demand. Therefore, where the world’s investment money is being spent their lawyers are present to make sure that all is processed smoothly and legally. With such an excit-
ing and engaging place to practice law this trip has reinforced that Hong Kong offers extensive areas to practice for those who wish to become solicitors. The trip, organised by Jessica Hui and Bertha Cheung, meant an extensive insight into the legal practices of the world’s top American and British law firms and their employment opportunities for after university. Those looking for an exciting and global career the work offered in Hong Kong does not disappoint and it’s a message made clear by all those we visited. David Winfield the head of Freshfields Bruckhaus Derringer’s Asia Finance Practice stated: “Work in Hong Kong crosses international borders every day.” He highlighted this with recent deals done by this magic circle firm namely the Initial
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Public Offering (IPO) of American luggage company Samsonite which raised US$1.25bn. Caterpillar’s bid to purchase China’s ERA Mining Machinery Limited, which is listed on the Hong Kong stock exchange, was also highlighted by Mr Winfield as an exciting prospect of working on. Hong Kong is clearly an active area for those who wish to practice. Best of all it shows no sign of changing in the near future and the trip showcased no greater preacher of this doctrine than Clifford Chance’s managing director of Asia Pacific Peter Charlton. He insisted that Asia and Hong Kong in particular were “The most exciting place to be a lawyer in the world and will be for years to come”. He supported this conclusion simply and astutely by pointing out that within 10 years Asia would have the world’s largest economy with China, the 3rd with Japan and the world’s 5th with India. Little can prove a more bullish indication of career prospects in Asia and Hong Kong than such figures. With such great potential for future growth on what is already an extremely prosperous city Paul Chow at Davis Polk highlighted for the trip what could be expected once work actually began in Hong Kong. With the opener, “to be a lawyer in Hong Kong is to do innovative and novel work,” he explained how the individual would benefit from joining as a lawyer in Hong Kong while growth continues to occur. Solicitors in Hong Kong have the unique opportunity to facilitate China to the rest of the world in their initial IPOs. With such a strong relationship established so early in their international expansion chances are you’ll interact well beyond this opening gambit. All can agree that would be a productive and lucrative consequence of building a career in Hong Kong. Concluded simply, the message given by every firm we visited, be it Magic Circle British like Linklaters and Allen & Overy or the Americans like Baker & McKenzie and Skadden, was that Hong Kong is a very exciting, innovative and engaging place to practice law. Unsurprisingly, therefore, these
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offices are expanding and recruitment is active and widespread with every law firm offering summer and winter vacation schemes with promising opportunities for them to develop into training contracts. Yet, it must be stressed Hong Kong is also extremely competitive and one cannot simply begin work in Hong Kong after studying in the UK. With the handover in 1997 came a progressive tightening of requirements for those who wish to practice in Hong Kong. After completing a law degree or completing the necessary conversion all overseas applicants must satisfy elements of the Postgraduate Certification in Laws (PCLL) conversion programmes and then complete the PCLL at the University of Hong Kong, City University Hong Kong or the Chinese University of Hong Kong. Do not be too concerned, however, as most of the law firms offer maintenance grants while you spend the year
taking the PCLL; making some friends in graduate recruitment can only help. Not as universal as the rules set by the Hong Kong law society is the language requirement. Mandarin is seen as an invaluable skill for those who wish to practice in Hong Kong. This is important mainly for client interaction and day to day business acumen of the modern lawyer. As a lawyer in Hong Kong you would not be expected to have a level of ability to translate legal documents, however, to be able to read the mandarin translations
of what you’re drafting and to be able to accurately see that the intention of meaning between the two versions can be reconciled can only benefit anyone’s application. This isn’t as crucial at the larger American offices with their JD associates from the United States. Skadden, for example, have decided to employ large scale translation departments in Shanghai and Beijing. Finally the skill most useful for the student who would want to work in Hong Kong is cultural open-mindedness. Hong Kong is a global financial centre with diversity never before seen catering economies representing 50% of the world’s population. Working with clients from China, Europe and Americas is only the basic. Clients will go seek legal advice in Hong Kong from South Korea, Indonesia and India and as China’s resource demands grow this will not only mean the entrenchment of Australia’s position as exporter of raw materials but an expansion of business into Africa. To the culturally open minded the world’s differences present in Hong Kong should provide the interest and engagement to launch a successful and exciting career in law. Hong Kong is New York City in the 1980s, engaging, exciting and innovative. To anyone who wishes to have an engaging, exciting and innovative career in commercial law Hong Kong is the city for you.
The life of a Hong Kong barrister - Temple Chambers
By Nico Nalbantian
This December LSE ACS Legal Insight group was also able to pay a visit to Hong Kong’s esteemed Temple Chambers. We were hosted by senior member of chambers Lisa Wong who provided a panel of 4 junior barristers to speak to
us. Temple Chambers is one of Hong Kong’s most prestigious legal practices and was formed in 1977. Its first head of chambers was Richard Mills-Owens, who was appointed Queen’s Counsel in 1979 and was conferred with the title of Honorary Life Member of the Hong Kong Bar Association in 2009. With over 45 members they are qualified to advise and act in respect of a broad range of litigation, arbitration and noncontentious matters. With such a high quality of lawyer available to answer our questions this visit proved an insightful opportunity for our group. Lisa Wong and her colleagues agreed to tell us about their work and were both eager and willing to share with us the nature of their profession. They were clear to set out the basic parameters to begin with and defined for us what a barrister does as opposed to a solicitor. The immediate impact was the professional consequences the different careers entail. In particular, a barrister’s trade mark is advocacy. A barrister will have to go to court to argue as well as offer legal advice and as such a deeper working legal knowledge is required. As always there is still paperwork and attention to detail is as crucial here as any other legal profession, however, transaction work is clearly out of the barrister’s remit. You may be involved in property litigation but there will be no contract drafting neither will there be any work on mergers and acquisitions or initial public offerings that their solicitor colleagues may be working on. More fundamentally, however, is that there is simply a lifestyle difference between being a member of chambers and in a law firm. Barristers are effectively self-employed as money is only made when work is done; there should be no expectation of a regular salary. They are also responsible for their rental payments at chambers, which is a notable amount not to be neglected. A barrister should also enjoy talking, it may sound obvious but a barrister’s bread and butter are confrontation and courtroom exposition. Anyone who would like to
be a barrister must enjoy talking and not fear it as you develop your own legal “voice” to use in court. While practising as a barrister you must be able to persuade people and enjoy doing it. On the whole a career in commercial law is not one which values sleep. To work as a barrister is no different, there may be no senior partner ordering you to work until 3am but that is a standard that one should push themselves to achieve. To become a successful barrister one must want to accomplish such a feat purely as an exercise of will. The trait highlighted by all of the pupils, tenants, junior barristers and Lisa Wong herself as crucial to a successful practice is perseverance. Perseverance and determination are necessary at all stage of a barrister’s practice. Beginning from your pupilage to achieving senior council determination and one’s will to persevere are what separate the great from the rest. After all it will be a challenge to even find a good pupillage and it will be an even greater challenge as well as highly competitive to find a good tenancy. This is nothing new to those applying to vacation schemes and trainee contracts; the necessity of determination and willpower comes from the lack of financial security for a barrister. At the end of the day a trainee solicitor will get paid. An individual hoping to
become a barrister in Hong Kong should assume no such luxury of being paid during their pupillage. The path of the barrister is one for individuals who relish the challenge of pitting their own abilities against another not out of stable long term material gain but out of the satisfaction such activity provides. Although challenging initially do not be concerned that being a barrister has no benefits. “The satisfaction one receives out of a successful case,” says Lisa Wong “is like completing a puzzle.” The mental exercise of new information being combined with the law and putting a case together is one she sees as a wonderful challenge. This, not to mince words, is complimented by a sense of vanity and pride which comes with success. A solicitor may be able to make claims about working on a multi-billion dollar IPO but a barrister knows that with their work a mark is being left to posterity on the very jurisprudence of Hong Kong. Academically as well, the mental challenge of being a barrister is that with every case new information is required and as such a barrister is constantly learning. This can be the calling of an expert witness and the ability to accurately take advantage of their expertise for the court’s understanding. Lisa Wong herself gave the range from learning the life of
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Kong airport to calling on Hong Kong’s expert on dementia. Everyone a barrister comes across is new: be it the client, the solicitor or the judge it keeps their professional life exciting. A confident sense of self-worth does not pay the rent, however, and a barrister when starting may see a few lean months but being a barrister in the long term can be a very rewarding experience, financially as well. Overheads for a barrister are lower than a solicitor’s and therefore profit margins are higher and the more senior you become the more financially rewarding the profession becomes. Therefore, it would be worthwhile for those wishing to pursue a career as a barrister to plan ahead fiscally. Becoming a barrister in Hong Kong is definitely a challenge and it is not a career one embarks on unless it comes with absolute certainty that it is what you wish to do with the rest of your life. However, should this idea appeal to you and you would like to know more about a career as a barrister in Hong Kong, it is definitely worth it to apply for mini-pupillage to get a taste of what it is like to be a barrister and at the same time gaining an insight into the nature and culture of this legal field. This way, perhaps, is the best way to make an informed decision if you intend to pursue a legal career in Hong Kong.
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alternative careers Demystifying media in China - Interview with Wu Ningning, Zhang Yunyi and Wang Wei By Lilian Lin The landscape of media industry in China is experiencing an unprecedented transformation, from previous airtight control of public opinion to the current time when a certain tolerance can be spotted in terms of opinion variety and the way that they are portrayed by mass media, partly thanks to the booming of social media in China. Though all media outlets of mainland China are state-owned in nature, the development and freedom they are enjoying is quite inspiring, the prospects of which have drawn loads of graduates to strive for landing a position to report on this dynamic country. The following are clippings of separated interviews with three current practitioners in both print and broadcast media in China, working as either editor or reporter. They all work for state-level media based in Beijing. Their experiences can thus provide job-seekers, who target this capital city as their career destination, with a better idea of what is expected from them. Interviewee 1: Wu Ningning, female, Chinese national, Beijing Could you please give a brief introduction of your newspaper and your position in it to our reader? A: I am now working in the English version of Global Times, metro section as managing editor. Founded in April 2009, the
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English-language Global Times is the major English newspaper in the nation. It provides in-depth coverage of controversial stories, from child AIDS victims to urban renewal, forced demolition and the fight against corruption. Its opinion pages feature heated debate over tough issues such as China’s use of the death penalty, the challenges of forming a new international order, and the nation’s growing wealth gap. The newspaper has become essential reading for every Chinawatcher. Its readers, both foreign and Chinese, include ambassadors, business leaders, politicians, and intellectuals. China’s top universities use the newspaper as a teaching tool for the nation’s future elite. Additionally, Beijing and Shanghai are joining the list of the world’s greatest cities. Thus the Global Times has 8-page daily supplements for each, keeping its readers up-to-date with what is happening in China’s two most exciting mega-cities. What is your educational background and work experience before working for this outlet? What about your foreign colleagues’? A: I majored in History in college, and got an MA in European History research. Thereafter I studied in The Johns Hopkins UniversityNanjing University Center for Chinese and American Studies
to further expand my knowledge in IR. My foreign colleagues have various educational backgrounds: Journalism, English literature and even Geography etc. They worked as journalist, freelancer, English teacher, tour guide or PR personnel before landing jobs here. How do you feel about working in this newspaper? A: With the development of the internet and public expectations, the media environment in China is becoming more relaxed. Undoubtedly, reporting news in China can be more exciting than elsewhere in the world. However, reporter’s job is not as glamorous as our western peers, I still look for the truth and try to help voiceless to voice to progress the society. Could you please give some tips or suggestions to people who want to work for your newspaper or other Chinese financial newspaper in the future? A: If any reporter wants to work in Chinese media, on one hand, he or she should firstly formulate his own thinking on China’s affairs. On the other hand, always remember gentle critics is often more effective and will truly prompt profound and long- lasting change in China. All in all, being a professional reporter is a game of wits and will. Interviewee 2: Zhang Yunyi, female, Chinese national, Beijing
Could you first give a brief introduction of the organization that you are working for and your position in it?
your colleagues, especially foreign colleagues? What were their work experiences before joining the agency?
A: I work for the CNC World, which is a newly-founded English TV station of Xinhua News Agency, as an editor. Xinhua is the official press agency of the government of PRC and the biggest center for collecting information and press conferences in the PRC. It is the largest news agency in the PRC, ahead of the China News Service. Xinhua is subordinate to the PRC State Council and reports to the Communist Party of China’s Publicity and Public Information Departments. Xinhua employs more than 10,000 people, operates 107 foreign bureaus worldwide, and maintains 31 bureaus in China— one for each province, plus a military bureau. As most of the newspapers in China cannot afford to station correspondents abroad, or even in every Chinese province, they rely on Xinhua feeds to fill their pages.
A: I hold a BA degree from the Communication University of China in the major of English Broadcasting and nchoring. Right after graduation in 2010, I was hired by Xinhua News Agency. Before that, I didn’t have much experience working in the media industry. Most of my foreign colleagues hold an BA or MA and their majors vary, but most of them studiy journalism or language related subjects. They worked in different countries outside their homeland as a teacher, translator or journalist.
What is your educational background and what about that of
As a recent graduate, what is your view on the current media industry in mainland China? Do you think it is a promising field? A: As a state-owned media outlet, Xinhua is the mouthpiece of the CCP and speaks for the interests of the party. But I don’t think it is unique in China, some western media organizations also speak
for a certain group of people for the sake of commercial interests. So I cannot agree with those critics saying western media are all way better than China’s. I am very optimistic about the prospect of China’s media industry development. With the booming of social media like Weibo in China, China’s media can be more liberal and serve as the watchdog in the society. But it takes time. What is your suggestion to people, both Chinese and foreigners, who intend to apply for jobs in China’s media organizations? A: You definitely need to understand China and what China’s status quo is. You have to know what kind of media organization it is before you set to apply for it. Also, you need to be “politically sensitive”- you should have a clear idea of what the “reporting taboo” is. There are a certain things that you cannot report in China’s media, no matter what kind of specific media organizations that you are in. It is vital that you need to have a good grasp of how to be a good
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journalist. For example, you need to be a good writer and observer. You need to be keen on tapping into interesting things and telling the story to your worldwide audience. You have to bear in mind that it is very competitive to be selected by Xinhua as you need to beat off hundreds of applicants to get the job. For foreigners, it will be a plus to have related educational background and work experience in journalism. But it is obviously not a must. I think you can start from freelancing for different media groups in China and then you can apply for jobs as staff writer or editor in the Xinhua News agency.
company?
Interviewee 3: Wang Wei, male, Chinese national, Beijing
As a recent graduate, what is your view on the current media industry in mainland China? Do you think it is a promising field?
Could you first give a brief intro of the organization that you are working for and your position in it? I’m now working at China Radio International, one of the three state broadcasters in China. I’m the presenter of a daily half-anhour news liveshow and a reporter at the same time. What is your educational background and what about your colleagues, esp. foreign colleagues? What were their work experiences before joining your
I’m a graduate from Communication University of China with a Bachelor of Art degree. Most of my Chinese colleagues have the same degrees. But new recruits are now required to possess a master degree. Foreign colleagues usually have various kinds of educational backgrounds. Most of them have a bachelor degree, few of them graduated with no degree. Prior to joining CRI, they hosted radio shows in other countries, taught English in China, and DJed in bars.
Traditional and new media are being combined together to build diverse and attractive dissemination patterns. Radio stations and newspapers start spending huge amount of money and time on producing visual products, which are then put on their websites or on TV. However, these products usually turn out to be of very low quality. Some of them even try to set up their own satellite TV station, like the state-run Xinhua’s CNC, which is considered to be this century’s biggest joke. And
TV stations are swallowing some small radio stations and newspapers. What is your suggestion to people, both Chinese and foreigners, who intend to apply for jobs in Chinese media organizations? Don’t be childish. Don’t try to change the media censorship in China on your own. You need to be familiar with how things work in China. There are a lot of rules and regulations that you might not understand, but try to comply with it if you want a job here. If you are not an adaptable person, don’t come here or you will end up not well. However, if you want to be a music DJ on radio, your educational background is not important, it’s better for you to be familiar with all kinds of music, not only hip-hop and heavy metals, but also pop and soul. And a prior DJ experience is a plus. If you want to be a journalist or news presenter, having prior working experiences in foreign news media is almost a must. And be sure you can live with the tight censorship on news.
Chinese youth entrepreneurship in London By Lilian Lin As London is by all measures the financial hub of the world, most college graduates here target at big-name investment banks or consultancy firms as their dream job destination. All kinds of financial job fairs never fail in spicing up the campus with spectacular queue-ups. Concurrently, a group of ambitious young financial talents turn to probe into another promising field for their career: to be their own boss and fulfill the entrepreneurship. And this group is expanding in the City with many international students, especially Chinese students, joining in.
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Despite the disheartening UK economy, young entrepreneurs are still encouraged by the local government, university and institutions which highlight innovation and technology. Toledo Hung, a Taiwan student graduated from UCL, is running a UCL start-up based on a digital service that helps retailers to easily merchandise their products on social media networks. Their company’s service enables in-shop consumers to share a particular promotion from a store or a restaurant with their friends, through facebook or other SNS in this kind, in exchange for an instant reward like a coupon. The sharing experience involves
simply using a mobile phone to scan a QR Code on a promotional display. The retailers that cooperate with their company benefit from this word-of-mouth marketing. His company owns an office on campus provided by UCL to incubate fresh programs. Various supporting policies for young entrepreneurs in London make Hung feel quite optimistic, “For example, Camden Town provides a working space for young people to set up their business for very low cost, and Technology Strategy Board launches many grants for startups to realize their business plan.”
With a strong advisory board, UCL supports aspiring UCLers to seek help and guidance for establishing their own business ventures, which facilitates international students like Hung, who stands out from business plan competitions, to develop their business globally. As a Chinese student like Hung, the advantage is clear-cut, “Chinese people have a well-connected and big community in London, and the community provides a great opportunity for Chinese young entrepreneurs to acquire resources and tap into any niche market. Also, for Chinese startups, we have better opportunity to spread the idea from London to the Great China market, since we have resource and network in China.” Chinese students are closely connected by Chinese student societies including CSSA, a student organization initiated by Chinese embassies here in the UK, which has extensive branches that cover key universities in major cities in the UK. Frequent gatherings make Chinese students easily engaged in local Chinese society. As to the flip side, Hung said: “language and culture differences are the biggest barriers for Chinese entrepreneurs in the UK. Although we can speak fluent English, it’s still difficult for Chinese entrepreneurs to negotiate with local companies to ink a series of legal
document. Also, it’s difficult to acquire entrepreneur visa in the UK, and we are not allowed to open a business account unless we have entrepreneur visa. But applying for visa is a huge problem for entrepreneurs from outside the UK, especially for dotcom startup since its initial capital is quite limited and it’s also difficult to get investment from big corporate.” Financial concern is shared by other Chinese young entrepreneurs. Wenqi Chen and Stephen XinHuang, founders of YEECCO, a technology platform which provides a simple and effective way of porting Apple’s Iphone applications to other smart phone platforms, recently decided to go back to mainland China to develop their business, after being caught by the difficulty in getting financed here in London in the context of financial turmoil. Their business plan won the first place in the 21 century China-UK entrepreneurship competition last year, however, they still have to bear the fact that local investors in London are less willing to invest in start-ups by international students. When asked about his view on how the current UK government policies are affecting Chinese start-ups here, Stephen said, “The entrepreneur visa requires too much money. I chose to run
my company here because the legal system in the UK is sound so it can provide better protection for us in terms of IPR, loan and company image etc. I hope the UK government can cut tax and loosen its visa restriction towards foreign entrepreneurs. Otherwise, why not go back to China? There awaits a promising market.” Indeed, it is worthwhile to take a second thought for those young entrepreneurs about how they should land their future business against the backdrop of dismayed European debt crisis, while China’s booming economy sketched a bright future for young business to grow into future. Chinese government is taking efforts to encourage young talents abroad, both Chinese and foreigners, to launch their business in China, which can be reflected by mushrooming special development zones in many cities, not only in those first-tier megacities, incubator offices provided by key universities and loads of subsidizing programs that are designed to attract hightech talents. It will be exciting for young entrepreneurs to start business in China now, as they will find themselves just in the middle of great transformation from “made in China” to “designed in China” or “imaged in China”.
Working for development - what an internship can teach you By Ami Shrestha Development literature is filled with bleak facts and figures. For instance, half the population of Bangladesh (49.6%) lived at less than $1.25 a day in 2005. The ongoing financial crisis has increased poverty rate in Bangladesh by 4.9% compared to what it would have been without the crisis. Very less has changed and progress is exceptionally slow in developing countries like Bangladesh. Do these grim figures only mean more challenges for development
or amidst these challenges lie opportunities and incentives for breakthroughs to change the scenario? As an aspiring development economist, I have always had these questions in mind and in order to look for answers, I joined BRAC in Bangladesh for a summer internship in order to experience working for development and fathom my intended career. While I had read and learned a lot about development work, this internship refined my outlook towards, and my expectations from a career in the field of development. Through
various field visits and the time spent in the head office, I took in the breadth of BRAC’s activities. In the eight weeks at BRAC, I learned a lot about BRAC, its approach and its impact in addition to the challenges and highlights of working for development, especially as a foreigner. Here, I will highlight what my internship was about, what I learned owing to my experience and what lessons I learned could mean for others. BRAC, the largest development organization in the world, is an ex-
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traordinary organization in term of its approach, strategies, reach and impact. It uses holistic approach at grassroots level to tackle the problems of underdevelopment and poverty and touches the lives of more than 110 million people around the world. Being a part of BRAC, I discerned the interesting presence of BRAC in Bangladesh. Apparently it touches lives of people from all socio-economic backgrounds in Bangladesh, though in totally different ways. It owns a BRAC bank, one of the largest and most expensive heritage store (Aarong) in Bangladesh, owns a dairy (Aarong dairy), provides microfinance, runs school, provides legal services, runs clinics and hospitals, assists the farmers, helps the ultra poor people, and so on. BRAC has rightly recognized the challenges for development as well as the trump card: the women, to tackle the challenges. Alike many other development organizations, BRAC capitalizes on women empowerment and has played its trump card pretty well. BRAC’s grassroots approach is its other forte. In order to comprehend this approach, I spent three weeks in rural Bangladesh observing various programmes under BRAC, and interviewing recipients as well as BRAC staff. The field visits constituted an interesting learning experience. Seeing firsthand the challenges and the efforts under way to tackle those problems was more illuminating than anything I had ever learned in my classes. Then I summed up my opinions in the reports I produced and submitted them to the head office. The next task I was assigned was to create an infographic that would sum up the entirety of BRAC in as few words as possible. This assignment allowed me to link the various programmes under BRAC and better understand the needs they cater to, and the tools and approaches they put into service. The next project I undertook was designing a sponsorship program for children in BRAC schools. I carried out the feasibility study and essential logistics, only to discover that the program was not a right
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fit for BRAC on account of BRAC’s sheer size that does not allow BRAC to spend a lot of resources on small projects. In addition, my eight weeks ended before any substantial accomplishment on the project could be made. Overall, my experience in Bangladesh as a foreign intern brought forward lessons on the challenges and opportunities in working for development as an outsider. Landing in a particularly conservative society, foreigners need to alter a lot of habits from clothing to their food choices. Even the work ethics and the style of working differs. It took me a while to get used to late or no replies to my emails. Likewise, people work on a loose schedule and works would rarely be done promptly. It takes a while to get over the initial cultural shock and only after getting properly oriented, one can begin the actual work of development. Further challenges in Dhaka arise from insecurity issues. These challenges complicate foreigners’ stay in Bangladesh. One of the main criticisms of development work comes from the critics of dependency theory who eye foreigners’ work in development with skepticism. The skepticism has some weight in the sense that foreigners can not understand a community’s needs as well as natives can. Local people are better trusted and can better communicate with members of a community. No wonder that BRAC hires mostly locals and even in international locations where BRAC has established itself, most of the employees are natives to those places. BRAC practices what it believes in: “Think Globally, Act Locally”. While BRAC brings in best practices and technology from within and abroad, local experts modify the practices to provide services that fit right. BRAC’s strategy is to train local people in the best practices from the best experts in the field. Again, outsiders can support the process of development, but not be in the vanguard. Every foreigner faces cultural dif-
ferences, and unfamiliarity with the language complicates any endeavor. Though I always had someone to translate conversations with local people, I was aware that true meanings cannot be translated even if words can be. Sometimes translations were limited due to limited English of the translator, while sometimes translations could be affected by translator’s opinions. Most of the times, the whole conversation would be summarized to familiarize me with only the core idea. Without the knowledge of the language, a foreigner cannot fully communicate with the locals and this greatly hinders any work for development. Likewise, an outsider’s attitude towards the local culture might differ from a native’s perspective. Particularly, differences can be perceived in the standpoints of different groups of people. For instance, even within my group of interns, some of the foreign interns had issues with the way Bangladeshi interns embraced the remarkable wealth inequality of the people. Interestingly, most of the Bangladeshi interns at BRAC were from well to do families who had their own chauffeurs and house maids, and were completely dependent on them for most of their chores. Some of the foreign interns were disturbed by the stark inequality and could not understand how the local interns took their helpers for granted and did not find the inequality severe. Here, I witnessed a gap in the viewpoints of different groups of people. Regrettably this ended in bad terms in our case when a foreign intern expressed her bewilderment in her blog by referring to particular cases. While she assumes that it is her right to expression, some local interns took it as offensive. A divide in the cultural perception of different groups was clearly noticeable. More than anyone particular’s fault, I believe that the dispute was the result of cultural differences. These kind of differences in perceptions pose further challenges for cooperation between different groups for the work of development.
Moreover, foreigners face further challenges in the form of temporary stay in the foreign country. Specially as an intern for a short period of eight weeks, I faced a lot of limitations in what projects I could undertake. Especially, the sponsorship project that I initiated, received encouraging support initially from most of the relevant people but met with a deadlock due to my temporary stay in addition to the fact that the project was not feasible. For a foreign intern like me, a lot of time is used up in getting oriented to the culture, place, people and work. Then when one begins to feel accustomed to the culture and is ready to start work, it is almost time to leave. Thus, there is very little a foreign intern can do despite true intentions to.
In spite of all the drawbacks of being a foreigner for the work of development, this field too has its own merits for foreigners. One of the best ways a foreigner can contribute to any field is by offering an outsider’s perspective that adds a new dimension to understanding the dynamics of any project or program. In many cases, outsiders can discern subtleties and things that locals might take for granted or tend to overlook. This was one of the areas I felt the most useful. Whenever possible I jumped in to give my opinions and remarks about any of the BRAC programs. The internship offered answers to several of my queries regarding the work for development while I now have some new questions I need to ponder on and look for
answers. While the experience intensified my aspiration to pursue my career in the field of development, it also taught me the limits for foreigners to propel positive change. There is an extent to which foreigners can contribute, in the end it has to be the locals who will execute any change. I noticed various opportunities through which positive change seemed possible but realized that there are unseen challenges and constraints. The idea of working towards making lives better sounds highly gratifying but there are limitations to what outsiders can do. Anyone considering a career in development should definitely opt for an internship to observe development work on the ground.
Interview with a development professional By Ami Shrestha Claire Bennett, passionate about global inequality and social justice, graduated with a first class masters degree in History from Cambridge university in 2003 and have undertaken various positions in international development overseas as well as development education in the UK. Starting off as a volunteer in Nepal, she is currently the country director for PHASE Nepal and simultaneously does freelance assignments in Cambodia. With more than a decade long experience as a development professional in Asia, Claire shares her experiences, and insights into development as a career in the interview published below: What made you choose to work for development? Why did you choose Asia? As a teenager, I was idealistic. I felt a real sense of outrage against injustice and wanted to do something meaningful. Fortunately, I stumbled across a volunteer opportunity in Nepal and ended up taking it. I was naïve and didn’t know what to expect from the experience. But that volunteer-
ing experience was the deciding factor and I chose to work for development. I was culturally drawn to Asia. After completely falling in love with Nepal and realizing that I could contribute to helping the societies there, I chose to go back there as a development worker. Can you share some of the highlights of your career in development? I naively decided to undertake a career in development thinking I will be able to do a lot. But development work is hugely challenging and straining. Nevertheless, it is highly rewarding. There are a lot of failures but every failure is matched by a success. One of the projects I worked in was a health project in a rural village in Nepal. We realized that the women were having difficulties following our instructions due to illiteracy. Not getting back the results we hoped for from the health project, we turned around the project and gave literacy classes to the women. After a year of informal training with very little investment, we saw concrete results. The women wrote their stories at the end of the year and one of the stories,
particularly, touched me. A woman shared with us how every time she went to the town and wanted to return back to her village in a bus, could never know which bus to take since she couldn’t read the names. After a year of literacy classes, she felt empowered and didn’t have to rely on anyone else to give her directions. This literacy project was nothing groundbreaking or solved all the problems of the women, but was definitely a success, impacted the lives it touched and thats what mattered. What are some of the challenges that you faced or continue to face? Work in development can be hugely straining and frustrating. Especially I have seen problems with aid backed by political motives and projects failing due to shortsightedness of people involved. The aid agency do not always know what is best for the people concerned and end up worsening the crisis. For instance, the World Food Programme helicoptered white rice to Humla, a remote region in Nepal suffering from shortage of food, for ten years. WFP spent $100 million a year supplying 1.2
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million people with white rice. This project acted as a disincentive to farming and led people to substitute more nutritious grains such as millet and barley for white rice. Realizing that the project was cost ineffective, WFP cut the program entirely with a 5 weeks of notice. Very irresponsible on their part, this act led to a chronic food crisis in the short term putting additional pressure on other projects like ours operating in that region. Other challenges we face are the issues of dependency. The rhetoric of empowerment and self-reliance is very disconnected from reality, especially when an external agency is undertaking a project. Where should the role of the external agency end and the role of the beneficiaries begin is still an unresolved issue. What is your impression of the work environment in Asia? Most of the places I have worked in Asia are culturally very similar but differ hugely politically. In Cambodia, the oppressive political regime and restricted freedom of speech hinders development efforts. NGOs are very sensitive about doing anything and this makes it difficult. They are nervous to advocate human rights issues that the government is opposing. As an outsider, you get angry for not being able to do things you want to. On the other hand, in Nepal, people are politically empowered and enjoy more freedom of speech. Youths stand for what they believe in and raise their voices for issues that concern them. This has created political problems since various factions vocalize their demands through political protests obstructing pub-
lic life. Another big problem is the lack of integrated work as there are cases when different agencies are doing similar programs. Cambodia is a haven for NGOs. When there are several NGOs working in a village requiring participation from the villagers, the villagers are put under a lot of stress. Especially since most of them are already burdened with their subsistence farming. There is a lot of competition between agencies to include more and more villagers into their programs and this competition is not beneficial to the beneficiaries. How can foreigners contribute in helping communities in developing countries uplift their conditions? The first thing foreigners need to do is learn. A lot of people want to immediately take actions. But it is very important to learn about the situation first. Response should be well considered. Most people do respond with best intentions but end up doing unsustainable programs. Outsiders need to do a lot of research beforehand. Secondly, foreigners willing to contribute need to find out if there are established efforts in areas they are interested in. Its much better to collaborate than to duplicate efforts without meaningful end results. Next, foreigners should understand that the essence of any project is its sustainability and should be ready to make a long term commitment. Also, you need to ensure that you volunteer ethically. There is a huge need for fundraising and undertaking a fundraising task is a noble effort but need to ensure that the money is going to the right place.
What prospects do Asia hold for students interested in a career in development? If you are interested, there is a lot that can be done. I hope the need for development work will be less in the future, but there definitely will be a range of opportunities to start a career in development in the foreseeable future. There is a multitude of things you can do, from civil services to jobs in the top down organizations that will stick around for a while. In your opinion, how best can students prepare for a career in development? Students need to realize that it will not be easy. There is a lot that needs to be learned before you embark on your career in development. You need to learn not only economic theories and more about the developing world, but also learn about your own values and what you want to do. Know what you want to commit to. It is the most challenging, nevertheless the most rewarding job you could possibly undertake. Be prepared to go with an open mind and open heart. What can and should be done to improve the quality of development work? More coordination between organizations is essential. It is unfortunate that NGOs see other NGOs as competitors and due to limited budget, what an NGO can do is largely limited. NGOs need to pool their resources together rather than compete with one another.
Working in a Hedge Fund - Interview with Dr. Eric Jackson and Jacky Chan of Ironfire Capital By Justin Lau Around the world, for university students interested in a career in
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finance who apply for internships and graduate positions, large banking and financial services companies have become their
main target. The availability of internships and graduate positions specifically based in Shanghai, Hong Kong or Singapore testify to
the lure of East Asian markets to both the financial services industry and their future employees. However, as many know hedge funds provide another format for the financial services industry. While names such as Bridgewater or BlackRock are no match for the brands of Goldman Sachs, J.P. Morgan or UBS, hedge funds are not only significant but interesting participants in the financial system. Globally, the hedge fund industry is worth $1.9 trillion (U.S. Dollars) and deal with a much wider range of investment and trading activities than a typical investment bank. For students who look for entrepreneurship and excitement in a career, working in a hedge fund should be an option. Ironfire Capital LLC is an equity long-biased and corporategovernance focused investment firm. With offices in Hong Kong and Shenzhen, Ironfire targets undervalued North American listed companies based in China with strong management, corporate governance and operations in large growing markets such as those in East Asia. In the following interview, Ironfire’s founder Dr. Eric Jackson and managing partner Jacky K.Y. Chan shed light on life in the hedge fund industry and how interesting and exciting a career in it can be. Eric Jackson graduated with a B.A. from McGill University in Canada and holds a PhD in Strategic Management and Corporate Government from Columbia University in New York. Previously, Jackson served as Vice President of Strategy and Business Development at VoiceGenie Technologies, a software firm now owned by Alcatel-Lucent. Jacky Chan holds a B.A. from the University of Western Ontario and a Masters of Management and Professional Accounting from the University of Toronto. He is a Certified Public Accountant as well as a Chartered Financial Analyst. JL: Hi Eric and Jacky, it is nice to be with you. First, let me start off by asking you, what is a hedge fund? What does a hedge fund do? EJ: A hedge fund format first ap-
peared in the 1950s in the US. As its name implies, the first hedge funds were set up as private partnerships where the investment managers tried to bet on specific stocks he felt were likely to go up over the next several months, while - at the same time - he set up several shorts to protect against the chance that the market would drop. In that way, the partnership was “hedged” to get the value of certain stocks going up while protecting against the broader market dropping. Today, there are many variations of hedge fund strategies from long only, short only, geographic focus, merger arbitrage, futures, or other exotic strategies. JL: What are the qualifications and skills needed for working at a hedge fund? JC: Hedge funds are set up as private partnerships and cannot be invested in by the general public. Only “accredited investors” who have some minimum level of wealth or earn a set salary per year, for example, $200,000 annually, are allowed to invest. Because it isn’t open to the general public, regulators usually do not impose a set of qualifications on the investment managers. They generally allow accredited investors to decide who they want to invest in. If the funds increase value, they generally attract more assets. If not, they don’t and generally wind down. Most hedge fund managers, however, have a finance background and have worked in the hedge fund industry for several years before starting their own firm. Hedge fund managers are usually extremely intelligent, up to date on market trends in the macro-economy, and have strong views on particular positions they take. Most are heavily financially oriented with MBAs, CPAs, and/or CFAs. Some have strong operational skills. Others have strong backgrounds in corporate governance. Many have deep trading experience. Usually they also surround themselves with strong risk management skills. In terms of information technology skills, I would say that there is a
minimum requirement but, after that, it’s not really a differentiator. You have to have a good original investment idea and then a trading strategy to make money from that idea. JL: What are the different roles within a hedge fund? EJ. There is generally a head of a fund, called a President, or Managing Member who oversees all functions in the firm. If it is a larger firm, there’s usually a Chief Investment Officer. He has a team of Portfolio Managers, or ‘PMs’, who oversee various positions in the firm. Those PMs then have research analysts that support them. Traders works with the PMs and CIO. There is usually a COO , Chief Operating Officer, who manages the firm’s growth and handles legal and HR funcitons. There might be a head of risk management and compliance. There might also be a head of marketing and investor relations. They are in charge of keeping existing clients happy and hopefully attracting new clients. As for entry-level positions, hedge funds would generally look for commercially aware people who have an analytical ability and strong academic records. Entry-level analysts do not have a prescribed job per se but they do monitor market data and perform analytical work for the PM. JL: What are the hours like and what would a typical day look like? EJ. Generally, they hours are very long. Global markets never close and there is usually always news breaking after hours affecting one’s positions. Most investment professionals get up early in the morning to catch up on overnight news affecting the global economy or their positions. You might get into work at 7 or 8am to prepare for planning meetings before the markets open. You’re then following the market all day and doing work on future potential position after hours until late. So, it can be a very consuming job. Hedge fund managers generally
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expect a lot from their team. JL: How does working in a small hedge fund differ from working in a larger hedge fund? How does Ironfire Capital differ from other firms? JC: There’s more risk in a smaller fund because small funds generally face the challenge of getting more assets. If you have a great year in your performance that can make it easier to raise money by investors might still be more comfortable giving money to a big name company. When you have a bad year as a small firm, it can make it much more difficult to raise money in the future. So bigger firms offer a young person “safety” and a chance to learn the business. However, you’re probably going to get less reward when they have a good year because you’re just one small person on the team. You’ll probably get a bigger reward at a smaller firm and a
chance to really help out on some key positions, making it more intellectually stimulating potentially. Small firms like ours are pretty entrepreneurial, so we expect a lot from our team members and ask them to work hard. If you like that, it’s a good fit. If not, it’s not. If you go with a smaller firm, you want to make sure you are confident in the main investment managers. JL: Thank you both for your time. Overall, hedge funds are not only very important financial institution but extremely interesting ones as well. As both Eric Jackson and Jacky Chan have shown, it is an industry that requires commitment, energy and above all, financial savviness. Working at a hedge fund is an exciting career choice for university students and graduates around the world and it is without doubt that many students
will have the both the inspiration and knowledge to succeed in it.
Eric Jackson Dr
Jacky K.Y.Chan
Promoting East Asian Languages in the UK - Interview with Catherine, the Language Coordinator in LSE By Mai Le
Dr Catherine Hua Xiang (M. Ed, PhD) is currently the Language Coordinator for Mandarin and Japanese at the Language Centre in LSE. Prior to that, she was the head of Mandarin at the Centre for East Asian Studies in University of Bristol. She also worked as Associate Lecturer in Open University and as External Examiners in several other UK universities such as University of Kent, University of Reading and Goldsmiths College,
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UoL. She has extensive experience in Mandarin Chinese teaching both in the UK and China with more than ten years of teaching in different institutions. Catherine is a member of the British Association of Applied Linguistics (BAAL) She used to be the representative of BAAL for the postgraduate Cambridge Linguistics Association. Her publications include the bestseller book ‘Mastering Chinese: the complete course for beginners’ (2010) and several other research papers in Chinese cultures and languages. In the interview today, Catherine would share with us her experiences adapting to different working cultures and the challenges she faced as a non-native citizen to develop her career in the UK. Catherine, would you like to
talk us briefly through your education experience and career profile? I completed my BA in Shanghai China, which was a double degree with Shanghai University and New York University. I worked part-time while I was a university student and then worked full time for a year as a language teacher, teaching both English and Mandarin. I first came to UK to pursue a Master Degree in Applied Linguistics. I got distinction for the Master of Education and it inspired to continue at a PhD level. My PhD is in the field of Cross-cultural Communication and Pragmatics, because I am fascinated by the way that culture impact on the way we speak and convey meaning through language. I started working part-time at the University of Bristol during my PhD to set up the Mandarin Program at Bristol and starting working there upon
the completion of my PhD. This April, I moved to London to take on the role as the language coordinator of Asian Languages at LSE. What was your experience pursuing higher education in the UK? When I was studying my Master at Bristol, I actually found it to rather relaxing. We had 8 units throughout the two terms and then followed by dissertation. Although it is the norm in UK, it was a lot less of contacting hours comparing to the education system I was used to in China. There was no compulsory homework. Of course you had the long reading list, but an essay for a whole unit wasn’t at the time seem a lot to me. I really started to appreciate the education system in UK when I started my PhD. Maybe because I was more mature by then, maybe because I started to understand the meaning and value of critical thinking. I was presenting my work in lots of international conferences and I did feel that my world was opened. I’ve learned a lot via researching, networking and presenting. With references to languages, how beneficial do you think to have a second or third languages when applying for jobs? And to that extent, how beneficial is it to learn Mandarin (without any prior background) for future job preparation? Statically, graduates have about 8% more chances to get a job if they speak a second or third language. So it is very important. I think that it is equally important from a personal level, as it is a very good way to keep your brain active and your mind open. With China’s rapid economic growth and its growing influence in the global politics, it is very useful for learning Mandarin for future job prospect. A lot of international companies now are heading toward the East, and with the global economic center moving toward the East, it is inevitable that speak-
ing the language of a nation of 1.3 billion people helps. This is precisely why that the Language Centre of LSE launched its Degree Option in Mandarin this year with three more levels to be added next year. Mandarin Chinese is not only the official language of Mainland China, but also of Taiwan, Singapore, and Malaysia. The Chinese language is so different and its history and culture is so rich, I personally think that it is just great fun and challenging to learn it. What level of effort/time it will takes for a British native to be proficient in Mandarin? Learning Chinese characters is the most challenging one. As the students are not familiar with it and it requires a lot of time and practice. In a UK context, it will take about 2 years to be able to communicate daily life situations in Mandarin but in order to read and write it would be a complete different story. From your work experience in Asia, what is the main difference between a career in teaching in Asia (China in particular) and in the UK? What is the major challenge you have faced at work in the UK? I think that it depends on where you teach and at what level. The Chinese education system up to High Education is still very much ‘marks’ driven. Therefore, teachers’ and students’ learning aim can be somehow distorted. In the UK, I believe marks are important too but there is probably more emphasis on the actual ability to apply the knowledge. In big cities, with the new educational reform in China, the situation is improving to certain extent. The teaching methods can be more interactive and creative. I think that changing job and settling in a new environment (UK) is always challenging. It takes a lot of courage to be you, but at the same time to win friends and gain respect. I feel that my latest experience of joining LSE has proved that sincerity and strong work eth-
ics go a long way. Having to work in different institutions, what do you think is the unique feature of LSE students? I love the LSE students. I love the fact that they are so multicultural and with such diversified backgrounds. I think that it enriches me as a lecturer as well as at a personal level. Even the beginner level degree students in my class managed to write ‘I love Catherine’ in the classroom in over 15 different languages! Would you recommend LSE students to volunteer or gain Englishteaching experience in China and why? I don’t see any reason why not. Teaching is a way of learning experience in itself - not to mention in a different country or culture. It gives you more opportunity to develop intercultural communication skills. Also it is useful to maybe see how the Chinese students learn and their attitude towards learning. Do you have any advice for LSE students or recent graduates who aim to develop their career in the UK? I understand that it is not easy for recent graduates in current job market. But I think it is extremely important to have self-confidence and self-awareness. These two qualities go hand in hand. To be fully aware of your own merits and limits so that you can be confident with yourself and the career that you want to have. Only with a clear vision of yourself and feel confident about it can you really shine through the interview and convince others that you are the best candidate. Thank you for your time. More information about Catherine and her career could be found in her LSE Expert website: http://www2.lse.ac.uk/ researchAndExpertise/Experts/prof ile. aspx?KeyValue=h.xiang@lse.ac.uk
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Teaching in China Interview with Tim Wei By Nico Nalbantian When teachers arrive in China what is the most common ‘cultural-shock’ moment of their initial time? I think the most common cultureshock for foreigners is that they find so many people in China, whether in big cities like Beijing, Shanghai, or in medium-sized cities like Yangzhou. When I told all volunteers that Yangzhou is a sort of “small” city in China because it only has a population of 4.6 million, they were all shocked----this number could only be found in big cities in the UK, and if my memory is right, Scotland only has a population of 4.7 million. Food is always a very big indicator of a country’s culture. Far away from shepherd’s pies or beans on toast do you find that British students adapt well to Chinese food and to the pace of life in China? Almost all British students adapt well to the food here in Yangzhou. I think the reason for this may be that Chinese food here is far away from the Chinese food back in Britain, and British students like trying the authentic Chinese food. For the adaptation to the pace of life in China, I can only give you my opinion in terms of Yangzhou, as the pace of life here is slow while in Beijing or Shanghai, it’s very fast. Most of British students like the pace of life here in Yangzhou because it’s very “laid-back” (this is quoted from an English student who studied in Oxford and got a job in London)----it’s very similar to the pace of life in most cities in Britain.
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Native English speakers tend not to be aware of the value of their language; can you give any insight into the value of a fluency in English can have for a person in China? Sometimes the fluency in English can make a big difference both in job-hunting and in business world. Since more and more multinationals are coming to China, speaking very good English can help people get into multinationals because communication is very important in these companies and the bosses want to find Chinese who can communicate well with them. One of the main attractions of teaching English abroad is interaction with locals and the enthusiasm of the students. Do you find this to be true of students in China when meeting teachers from Europe or America? Yes, this is true. Chinese students are very hard-working and eager to learn. They don’t have many chances to meet foreigners, especially those students in small cities and rural areas. I can give you a true story of this. One English girl, who finished her first degree in Cambridge, came to Yangzhou to teach in a middle school in Yizheng, Yangzhou for a term (Yizheng is a sub-city in Yangzhou, just like Jiangdu). Students there were so excited to see a foreign teacher teaching there; every time she finished her lesson, students surrounded her asking her for signatures and for taking pictures with her. Later she told me that she felt that she was kind of movie star. Hahaha! Lastly, China is known for pandas, kung fur and chow mein. What is a more important trait of Chinese culture an American or European should know about before they arrive in China? This is a very good question. Before coming to China, a westerner should have this in mind that China has been changing so fast, westerners would know more if they experience it by themselves
rather than getting information from CNN, BBC, etc. because sometimes these media sources are biased.
life A Western perspective on life in Hong Kong Interview with Thomas Rees, a Skadden trainee By Nico Nalbantian England is particularly famous for its damp and cold weather. How is Hong Kong’s weather and do you prefer it to English weather? Or does it present a different set of discomforts? I only saw the back end of the hottest part of Hong Kong. It was September when I arrived and the temperature ranged between 25 and 30 degrees with high humidity. I won’t complain about warm weather though! It meant I could go wake boarding, tan and relax on the weekends. In December the weather becomes slightly cooler bringing a fresher feel about Hong Kong but nowhere near as cold as the UK, I still got sunburnt while out trekking. If anyone was to complain it would be about the odd typhoon which hit Hong Kong . This does mean that occasionally the authorities tell you not to go to work but Skadden has remote log in. The weather is pretty much perfect. Slightly humid in the summer for the commute though. Given that Hong Kong is such a large city how easy is it to get around? Is infrastructure more North American where a car is the preferred method of transport or European where public transport is convenient enough to use? The MTR is cheap, reliable, and there’s even signal underground! There are the trams and bus networks which are cheap, frequent and reliable. There are also the boats to the Kowloon side; to be honest living in Kowloon and taking the ferry to work each day
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would be a stunning start to the day. Everything I need is on my doorstep. Sometimes I take the MTR and taxis are ridiculously cheap compared to London. Therefore, I’d say Hong Kong is more European except cheaper and more reliable. I can walk to most locations so there is really no need to own a car. Cars are quite expensive in HK anyway and thus no real motivation to buy a one. Hong Kong is famous for its shopping and has the most Louis Vuitton stores of any city in the world. Have you found that this holds true and does it play a large part of life in Hong Kong? There is huge demand for luxury goods in HK, you regularly see many people willing to buy new luxury goods. People on the whole in Hong Kong seem to give greater care towards their personal appearance. High quality goods are also at a great value. However, hiking plays a large part in my free time which many local people don’t really understand. There is also close proximity to other parts of Asia such as Shanghai, Singapore and even Seoul. The airport express is so easy everything is just on a plate for you so shopping doesn’t play as large a role in my life. How Given that Hong Kong is a large city how safe is it? Is there a feeling of personal safety when walking around Hong Kong? Never felt unsafe in Hong Kong, especially on Hong Kong island.
How is Hong Kong’s nightlife? How does it compare to nightclubs in cities like London? For an ultimate party night you can hit Lan Kwai Fong where you can vary the night on how you feel. Things range from studenty cheesy nights to high quality and sophisticated night clubs. It is definitely a high profile city for nightlife with Dr Dre and Snoop Dog having both performed in HK recently with other high profile bands often touring in the city. Also to mark the city are stunning roof top bars, ozone lounge being a particularly cool one. There are even some bars in Soho which make me reminiscent of Shoreditch. A particular favourite had a like a converted living room vibe and pretty good music; more memorable was a speakeasy bar where you had to walk through a fish market on peal street and ring the doorbell to get in. It was rather amazing transition, from a typical Hong Kong street then ending up in a 1930s joint. I never ceased to be amazed about some of the places that can be found in Hong Kong. Wan Chai on Wednesdays is good as well. Certainly on part with London if not better especially with the constant move of people. As a major Asian city clearly the culinary focus will be geared towards the Asian pallet. Have you enjoyed the food in Hong Kong? Whenever you have craved a more European flavour have you been able to find it? I really appreciate the food. Hong Kong food is out of this world be it cheap snacks or high class res-
taurants, all is delicious. An amazingly consistent high quality across every the price bracket. I eat Asian food almost consistently and I am a particular fan of ‘Tim Ho Wong’ Dim Sum as well as Cantonese style food. Shanghainese restaurants and Japanese sushi are also great in Hong Kong. Vietnamese and Thai food is easy to find. I even found some Nepalese food! Szechuan food packs a punch and is excellent. Indian food I hear is good but haven’t tried it yet, I’m told Chongking mansions are where to go. Hong Kong caters for everyone, even if you would like a Moroccan meal. Also dietary requirements, be it Vegetarian or Vegan it doesn’t matte,r they cater for everyone. If someone was newly arrived in Hong Kong what would you advise them not to do? I would advise someone not to waste the opportunity to get out there to socialize and network. Certainly Hong Kong as such an exciting, constantly changing, fast-paced and truly international city provides many opportunities to make contacts who may prove useful at some point in the future. I love London as well, just to be clear!
Contrasting Flavours - East and West By Hadrian Ho Alright, it is the middle of the night and you’re working through your public law essay that is supposed to be due tomorrow. You have no idea what you’re supposed to write, you’re tired and more importantly, you’re hungry. The only options here are the non-authentic, fast, greasy, Chinese food offered in Chinatown, the odd kebab shops and the ever-so reliant Macs/Burger King/KFC. But aren’t you sick of the choices available? The lack of variety of food that is offered and the pathetic number of food outlets still open after 10pm are simply astonishing. In Hong Kong where the city never sleeps, you’re able to find food no matter where you look provided that you’re not camping in the dark in the hills of Sai Kung. There are countless coffeeshops that offer amazing food ranging from pho (HKD$28 at Pho Saigon) to kebab (HKD$60 from Ebeneezer’s Kebabs and Pizzeria) to curry with rice (HKD$35 from Maxim) to the standard fishball noodles (HKD$29 at Tsui Wah). More importantly these coffeeshops (also known as cha charn tang) are dotted all around Hong Kong and are opened till the wee hours of the night. Hong Kong coffeeshops are a distinct breed. In the past, they were established to provide cheap, quality food and slowly with the gradual introduction of international cuisine in Hong Kong, coffeeshops were then able to provide both local and international cuisines at cheap affordable prices. Although your experience of having one sim-
ple fishball noodle at a coffeeshop maybe as ‘local’ as you can get, it is definitely not for the faint-hearted. Be wary of the environment that you are going to dine in if you decide to have a late night snack at a coffeeshop. The unforgiving bright neon lights, the ugly white tiles, the loud Cantonese chatter and the smell of chicken stock, fresh noodle flour and weird concoctions of Chinese sauces that fills the air are part and parcel of your dining experience. Although most coffeeshops are not as luxurious as the Gordon Ramsay nor even as modestly decorated as your local Pret A Manger, yet if you do manage to overcome their gross exteriors and keep an open mind, you will realise that these simple and perhaps at times unhygienic gastronomic dens offer the best local food and perhaps truly represent Hong Kong’s food culture.
Chicken Pho set meal - $28HKD However, not all good Chinese food are to be found in the dodgy noodle stalls or coffeeshops. Dimsum, or also known literally as touches of the heart’, is perhaps the most celebrated icon of Cantonese cuisine and they are served in proper, well decorated Chinese restaurants or also known as Chao Lau. Dimsum refers to a whole
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series of Chinese snacks and delicacies that was originally meant to be a light snack rather than a main meal. These snacks include Siew mai, delicious pork dumplings wrapped in yellow flour with a touch of crab roe to garnish, Har gao - a translucent prawn dumpling and Cheong Fun, steamed flour rolls with either barbeque pork or prawns stuffing and they roughly cost in between $10 to $45 HKD depending on the time you place your order (some restaurants have brunch/afternoon high tea discounts) and the Dimsum you order. Dim sum is usually linked with the tradition of tea tasting, also known as Yum Cha. The unique culinary art of Dim sum and Tea tasting originated with the Cantonese in Sothern China, who over the centuries transformed yum cha from a relaxing break to a loud and happy dining experience. For people living In Hong Kong and in most cities and towns in China’s Guangdong province, yum cha is treated as a weekend family thing. Since many restaurants start serving dim sum as early as five AM, it is not surprising to see the elderly gather to eat dim sum, read newspaper, sip tea and chat among themselves after their morning exercises while they wait for the rest of the family to come. Once the family arrives, they will then order individual bowls of rice or congee and main dishes or noodles to share.
Pho Saigon
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The habit of sharing food with one another that is prevalent not only in Dim sum, but also in Chinese cuisine in general is a stark contrast to the individual dining habits as practiced in most of the western countries. One can draw a comparison with the Chinese Hotpot, in which everyone shares and the everyday Pasta, which in most cases, is only consumed by one individual. It can be argued that such habits reflect the difference between the inherent values of the Chinese and Westerners and can be extrapolated to the way the Chinese and the Westerners treat business dealings. It can be suggested that the Chinese way (more specifically in Mainland China and less so in Hong Kong and other areas) of doing business with one another involves a long process of negotiation and they will begin a discussion with nothing and slowly end up with something. The Chinese will discuss about the big picture or the possibilities of a joint venture while sharing a plate of spicy beancurd with minced meat or a plate of roast duck and commenting about it during a casual business lunch. The act of sharing your food with one another can be seen as a voluntary gesture to enter negotiations, to come together and to be part of one. Such casual business lunches will then be followed by similar lunches and dinners until a point where details will be finalized in the offices.
On the other hand, a business lunch in the west involves ordering your own plate of food and there is hardly any brainstorming going on because your clients expect you to be well prepared with a business plan. As you are having your spaghetti bolognaise, you are expected to read out the exact details on how you are supposed to finalize the merger or perhaps improve the company’s revenue. However if you are unprepared, you should be prepared to face dire consequences for wasting your client’s time. Hence, having a meal with your client becomes another avenue which you can use to put forward your plans and ideas and serves no other purposes other than to finalize details of a merger plan or to answer questions from your client. To the average westerner, the business culture in Mainland China and to a lesser extent in Hong Kong and other areas may seem odd. Take the prevalent exchange of gifts as an example, the staunch western supporter of ideals such as liberty and equality may view it as bribery and yet in the eyes of the Chinese, it is a sign of respect and a friendly gesture. Although this implies a certain conflict of ideals and perspectives, yet if one keeps an open mind and overcomes his own concept of what is disgusting or wrong, then he is one step closer to claiming the ultimate prize in Greater China.
An average coffeeshop
credits
references Published by LSESU Asian Careers Society 2011-12 Founder Samuel Wong Diana Chan
Editor-in-chief Raphael Ka Hong Pang
Global Economy
Design Harris Ho Pearl Ho
Secretary Karen Yung (ACJ) Bertha Cheung (ACS) Treasurer Wai Hang Louie
Silence emergence of South Korea in the global economy 1. Goldman Sachs Report (2011) 2. IBID (2011) 3. O. Yiu Kwon, Korea’s Economy Prospects Should investors invest in China? A paradox 4. GMO and global financial data. Accessed on September 30, 2010. 5. Morgan Stanley Blue Paper Chinese Economy through 2020. Accessed on November 8, 2010. 6. http://www.stern.nyu. edu/~adamodar/pc/datasets/ divfundChina.xls 7. Lipman, Joshua Klein (April 2011). “Law of Yuan Price: Estimating Equilibrium of the Renminbi”. Michigan Journal of Business 4 (2). 8. IMF World Economy Outlook Database, September 2011
Editorial Board Begonia Sun Nico Nalbantian Kitty Lum Noble Mak Roberta Diana Benjamin Fung Publication Hon Ting Tsoi Anthony Ng Hansen Tan
Journalist Deepanshu Mohan Donald Poon Lilian Lin Ami Shrestha Justin Lau Mai Le Hadrian Ho Simon Lam Nelson Poon
9. http://www.futuresmag.com/ Issues/2010/December-2010/Pages/ The-Shanghai-connection.aspx?page=3 10. http://ftalphaville.ft.com/ blog/2011/02/10/485186/gdp-growthand-equities-a-match-made-innowhere/ 11. Gustave Le Bon (1895), The Crowd: A Study of the Popular Mind
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Investment Banking 12. Narsalay, R and Gupta, A. (2011). Closing the commitment gap. Accenture Outlook 2011. 9 (1), 2. 13. Moe, T Maasry, C Tang, R. (2010). EM Equity in Two Decades: A Changing Landscape. Global Economics Paper No: 204 . 45 (1), 1. 14. Richard Wilson. (2008). Top 3 Trends Affecting Private Wealth Management. Investopia.
Sponsorship Matthew Choi Jess Hui Anthea Cheung Kathy Lui Catherine Lee Stanley Wong Vince Wong Bernard Ng
Alternative Careers
Working for development - what an internship can teach you 15. The World Bank, Poverty Headcount Ratio at $1.25 dollar a day. Accessed on August 21, 2011. http://data. worldbank.org/indicator/SI.POV.DDAY/ countries?page=1&order=wbapi_data_ value_2009%20wbapi_data_value%20 wbapi_data_value-last&sort=asc 16. The World Bank, Macro and Financial crisis. Accessed on August 21, 2011. http://web.worldbank.org/ WBSITE/EXTERNAL/TOPICS/EXTPO VERTY/0,,contentMDK:22569719~p agePK:148956~piPK:216618~theSite PK:336992,00.html
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35 | Life